Kharif sowing and Monsoon update – 2023

16 Oct 2023 , 10:50 AM

While the overall acreage sown were marginally up YoY, acreages for pulses are lower by ~4%. This was offset by the higher acreage in rice and maize. This year, 26 out of the 36 subdivisions in India received normal or better rains with the overall deficit at 6%; however, deficit over North-East and South India was much wider at 18% and 8%, respectively. The impact of this will probably affect the output in key crops like sugarcane, rice and some coarse cereals. Sowing in key Agchem consuming states has been weak this year. Fertilisers viz DAP and NPK consumption were seen rising, while urea and MOP volumes were subdued. Reservoir levels in South and East India are at a large deficit to average levels – which could impact sowing patterns during Rabi. 

Shift in acreages towards rice and maize: In Kharif’23, the overall acreages were up 0.2mn hectare, on the back of 0.77mn and 0.32mn hectare increase in rice and cereals while pulses, oilseeds and cotton acreages declined 0.54mn, 0.33mn and 0.41mn hectares, respectively. In rice, Bihar and Jharkhand have shown sharp jumps while in cereals, the jump is driven by maize. Though oil seeds are down 0.32mn hectares, the key crop soyabean is up 0.08mn hectares. 

Reservoir levels down in South; Rabi acreages at risk: Though pan-India monsoons ended at 94% of LPA, the deficit was much wider over South peninsula and North-East, at 8% and 12% resp. The impact of lower rainfall is likely to affect the output in sugarcane, rice and some coarse cereals. In the South Peninsula, Rabi sowing is at risk, as the reservoir levels at 50% are down sharply 46% YoY. Reservoir levels in Maharashtra too, are down 15% YoY. 

Crop realisations holding off: Sowing is skewed towards remunerative crops like coarse cereals, sugar cane (whose prices rose ~4-22% YoY during the Kharif season). Rice acreage also picked up as prices turned attractive (up 13% YoY). Sowing has moved away from cotton and oilseeds, with prices correcting ~16-21%.