The commodities market will be hit hard by the colossal Rs 32,000 crore crop loss in Karnataka and Andhra Pradesh, reports Shantanu Guha Ray
UNION AGRICULTURE Minister Sharad Pawar is a troubled man. Elections in Maharashtra are near but the larger crisis is a crop damage report from Karnataka and Andhra Pradesh (AP) that landed on his desk on October 6. After the monsoons failed and a drought parched large parts of the nation, the worst Krishna river floods in over a century occurred. The report stated that floods had caused a whopping Rs 32,000 crore of crop losses, particularly among kharif crops, which are usually sown with the onset of the monsoon. Consequently, the states are now seeking about Rs 20,000 crore from the Centre.
“The crop losses are huge and will impact us in a big way,” Agriculture Secretary T Nanda Kumar told TEHELKA, indicating the government might have to import rice to meet national requirements. Minister of State for Agriculture KV Thomas has already said that New Delhi could cut rice import duties since paddy cultivation had dropped this kharif by 59.2 lakh hectares over last year. Ministry officials say that besides paddy, crucial sugarcane, onion and horticultural crops have been swept away by the floods ravaging Karnataka, AP and some parts of Maharashtra.
Officials wishing to remain anonymous say that with retail prices of onion, sugarcane and groundnut already high, the deluge will have far-reaching implications on their availability and prices. “The shortfall in kharif production is currently estimated at 16 million tonnes and it could eventually increase to 20 million tonnes,” says one official. Paddy and edible oil crops have already been affected by the drought in the northern states.
Karnataka and Andhra Pradesh want Rs 20,000 crore as aid
Kharif crop shortfall currently estimated at 20 million tonnes
Prices of onion, sugarcane, groundnut and other crops could double
India to import rice to offset low supplies due to flood and rains
Heavy rainfall completely destroys secondary crops in Maharashtra
Officials from Karnataka and AP are worried that prices of the early onion crop, chillies, grapes and pomegranates will shoot up. Onion is already selling at Rs 28 per kg in Karnataka, its third largest producer. Chances are that this high price could double in a month. Worse, the pomegranate crop has been totally washed away and the area under groundnut is lower by 8.14 lakh hectares than last season. “This is bad news for the edible oil market,” agrees Anjani Sinha of the Mumbai-based Multi-Commodities Exchange. “Cotton, bananas, sapota and paddy have been badly hit,” AV Ranga Rao, member of the Agricultural and Processed Food Products Export Development Authority, told TEHELKA, adding, “Over two lakh hectares of paddy are submerged in AP and Karnataka and the pigeon pea (arhar) crop has been hit.”
The already high prices of essential vegetables could double in a month’s time
Apart from these two states, Maharashtra will lose early-sown coarse cereals. Heavy rainfall there has affected jowar and bajra, which are are common secondary crops. The unseasonal rain has also hit paddy in areas like Ratnagiri and tens of thousands of hectares of jowar are being re-sown. Officials in the agriculture ministry say that the combined impact of drought and unseasonal rains on the kharif crop will have a severe fallout across north India. The chances are a price spike — not just in sugar but in cereals as well — may well happen around Diwali, when the demand due to the festive season is high. A definite shortfall of good news.