New Delhi, June 17 - India's heavy early monsoon rains have raised hopes of bumper oilseeds and rice crops, which would boost supplies and help tame inflation now ruling at its highest in seven years, traders and analysts said.
A good monsoon helps improve soil moisture, lowers irrigation costs, recharges groundwater and encourages farmers to sow early, all factors which point to increased food output.
Sweeping across the subcontinent from June to September, the monsoon irrigates as much as 60 percent of India's farmland. In the first half of June, this year's rains were more than 40 percent above the long-term average, according to a weather official.
Early June is a key time for many of India's most important crops, with farmers sowing soybean, groundnut and rice.
Govindbhai Patel, a leading oilseed trader from western Gujarat state, said the rains had sparked hopes of higher output of soybean and groundnut, largely grown in the western states of Maharashtra and Gujarat and central Madhya Pradesh state.
"We believe production of soybean will be at least 1.5 million tonnes more than last year's output of around 9.5-10.0 million tonnes," he said.
Higher oilseed production will help India cut imports, which account for half of the about 11 million tonnes it consumes.
A favourable monsoon could increase rice output in the year to March 2009 but it is too early to gauge by how much, said Anil K. Mittal, chairman and managing director of KRBL Ltd, a leading rice exporter.
The area under groundnut cultivation in Gujarat, the main producer, was likely to rise to about 1.8 million hectares in from 1.67 million hectares last year, Patel said.
"We are witnessing timely sowing due to the good monsoon," he said. Patel expects the area under soybean to rise as some farmers in the western state of Maharashtra switch from sugarcane, supplies of which are still backed up at mills, lowering prices.
Groundnut acreage may also get a boost at the expense of cotton cultivation in neighbouring Gujarat.
Maharashtra is India's leading sugar producing state and higher output over the last two years has dampened sentiment, said Praful Vithalani, who runs local brokerage Jagjivan Keshavji & Co.
Likewise, bumper cotton crops since 2006, a result of increasing usage of genetically modified cotton seeds, are likely to put people off growing the fibre, analysts say.
"Oilseed farmers' dream to earn more by cashing in on high vegetable oil prices will be helped by the monsoon," Patel said.