Canada Markets

The Indian government released its Third Advance Estimates of Production of Foodgrains for 2014/15, with total grain production falling to 251.12 million tons, down 5.4% from the 265.57 mmt final estimate for 2013/14. The Second Advance Estimates released in February held hope for a crop of 257.07 mmt crop, while the 2014/15 target for total food grains production at was pegged at 261 mmt.

Total pulse production was estimated at 17.38 mmt for 2014/15, down 9.7% or 1.87 mmt from the final 2013/14 production of 19.25 mmt and also below the 2014/15 target of 19.5 mmt. The Second Advance Estimates release in February reported a forecast of 18.43 mmt.

The country has faced challenges during 2014/15, first with a 12% shortfall in the rains received in the June through September monsoon period which negatively affected the summer Kharif crop, then receiving excessive rain and hail during February/March to reduce the potential of the winter Rabi crop.

The attached chart shows the latest estimate for 2014/15 summer Kharif production of all pulses (blue bars, July through October growing season) at 5.52 mmt, down .5 mmt from 2013/14 production and a five-year low. The much larger Rabi crop (green bars, October through March growing season) is now pegged at 11.87 mmt, 1.38 mmt below last year and a three-year low. The largest impact was seen in the country's chickpea production, with an estimate of 7.59 mmt released for the 2014/15 Rabi crop, which is almost 2 mmt below 2013/14. Chickpea production was targeted to make up close to 48% of India's total pulse production.

Canada's August-through-March export data shows dry pea exports at 2.292 mmt, up 23.6% from 2013/14. The volume destined for India totaled 884,814 mt, 38.6% of the total and up 41% from the 2013/14. Lentil exports in the same period totaled 1.53 mmt, up 40% from the same period last year. Of this volume, 398,082 mt was destined for India, 26% of the total volume and up 66% from year-ago volumes, according to Statistics Canada data.

As pulse supplies dwindle on the Prairies, traders will be focused on the potential of the Prairies crop, as well as the impact of the current El Nino event on production on both the Prairies and in India.

The National Oceanic and Atmospheric Administration issued an El Nino advisory in March, suggesting the chances of such an event at 50 to 60% on March 5, suggesting that "widespread or significant global weather pattern impacts are not anticipated." This week the same organization bumped up the chances to 90%, with the odds of greater than 80% that the event will last through 2015. Given the timing of the study, it is indicated that there remains "considerable uncertainty" surrounding the strength of the event.

Research discussed in a 2014 Canada Markets Blog suggests that El Nino events have lead to drought in India in the years of 2002, 2004 and 2009, although while El Nino years impact the Indian monsoon, overall rains have been described as normal during many El Nino years. In 2002, overall food grain production fell 18%, while monsoon rains fell 19% from the previous year. In 2009, food grain production fell 6.8% as compared to a 23% reduction in monsoon rains, while in 2010, another El Nino year, food grain production actually increased by 12% while rains were normal, according to the Indian Express. This portrays the difficulty in making forecasts based on the looming El Nino event this summer.

The most recent estates from India's Meteorological Department suggests this summer's monsoon season, relied upon for the summer Kharif crop, will be 93% of the long-term average.

Business-standard.com suggests that agriculture makes up 15% of India's GDP but employs 60% of the population. Forty percent of the cropland is irrigated.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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