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Drought to cut summer-sown corn output by 15%: Industry

Reuters     September 15, 2015

Summer-sown corn output is likely to fall more than 15 per cent this year as the first back-to-back drought in three decades wilts crops and forces farmers to let land lie fallow, trade and industry officials said.

Lower output in the main exporter of corn to Southeast Asia, at a time when the world is flush with Latin American and US supplies, should help underpin global prices of the grain that recently hit a 10-month low of $3.46-1/2 per bushel.

"The (Indian corn) crop looks reasonably lower despite a few spells of rains that have been too little, too late to avert a drought," Amit Sachdev, India representative of the US Grains Council, said on Monday.

Rains are crucial for agriculture in India, where more than half the farmland lacks irrigation facilities. But this year, rainfall over the four-month monsoon season that started in June has been 16 per cent below average.

As a result, corn growers in Telangana, Karnataka and Andhra Pradesh have not been able to plough some areas, Sachdev said.

Output from the three could drop to 3.2-4.2 million tonne from 6.5 million tonne in the earlier season, he added.

Higher acreage in Rajasthan and Uttar Pradesh as well as Madhya Pradesh will not be able to make up for the shortfall in the three southern states that primarily produce high-yielding hybrid corn varieties, Sachdev said.

Overall per-hectare yield will hover at around 1.9 tonne in India, indicating an output of about 13.8 million tonne, versus nearly 16.5 million tonne in the previous season, he said.

BK Anand, chief of the grains and oilseeds division of the Indian unit of Cargill, agreed that summer-sown corn output would drop, saying: "There is no doubt about it."

India has two main corn crops.

The summer crop, which accounts for nearly 80 per cent of the country's total output, is planted in June-July and harvested from October and the winter one is planted in October-November and harvested from March-April. Of late, farmers have started growing a smaller spring crop.

The advent of the spring crop and continued lower exports, down more than 70 per cent so far for the year ending September, as corn from other countries remain cheaper will keep stocks of the grain at comfortable levels in India, industry sources said.

Domestic corn use has risen about 60 per cent since the early 2000s to about 19 million tonnes with more of it being consumed as feed by the country's growing poultry sector. Corn output has at least doubled over the period.

(Reporting by Mayank Bhardwaj)

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