Drought-like conditions dampen India’s rice production outlook in MY2022/23

INDIA – Drought-like conditions in India’s major rice and sugar-producing regions have dampened product forecasts for the market year (MY) 2022/23, according to a recent report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).

Major rice-growing states in the Gangetic Plains are experiencing what USDA describes as drought-like conditions, reduced plantings, and yields of rice.

As a result, the USDA forecasts India to produce to 122 MMT in MY2022/23, down from last year’s 130.3 MMT.

“Nonetheless, any extended dry spells through the harvest in late October in the already moisture-stressed east/northeast Indian crop, as well as the possibilities of cyclones in October-November along the eastern coast, could further affect rice production prospects in MY 2022/2023,” USDA indicated in the report.

Unlike Rice, wheat has been given a favorable outlook with USDA estimating MY 2022/2023 wheat production at 99 MMT “based on the latest market reports and strong domestic prices suggesting tight domestic supplies.”

To allay any fear of shortages, Sudhanshu Pandey, the most senior civil servant at the ministry, said the country has enough stocks of wheat and rice to meet its obligations and would “intervene if needed” by selling wheat on the open market to temper food inflation.

To protect local supply, the government has also maintained its ban on wheat exports after it became apparent that this year’s intense heat wave and drought would severely hamper production.

India has also restricted rice exports, as scant rains in the country’s east affected the planting of the water-thirsty crop.

As drought continues to affect the country, USDA estimates that India will produce 35.8 million metric tons (MMT) of centrifugal sugar, three percent below the previous season.

The out-year sugar consumption forecast is maintained at 29 MMT, mainly driven by increased appetite for the sweetener from a growing food manufacturing sector and middle class with greater disposable incomes.

Although production will be in surplus, reports suggest that the Indian government may limit exports to 8 MMT for the next marketing year to maintain sufficient supply following a record export year, but this has yet to be confirmed by the Ministry of Food and Public Distribution.