>India floods hit output in key rice growing state

New Delhi - Flooding may reduce output in India's key rice growing state of Andhra Pradesh by up to a third from the last crop year ended Sept. 30, likely slashing supplies to federal grain reserves this year, the state agriculture minister and industry officials said Monday.

India expects summer-sown crop output to drop following the lowest monsoon rainfall levels since 1972, as large tracts of land were left uncultivated.

A late revival of the monsoon rains is expected to improve crop yields, but flooding in two states could cut total crop output more than earlier estimated.

Andhra Pradesh Agriculture Minister Neelakanthapuram Raghuveera Reddy told Dow Jones Newswires the state's summer-sown rice and other crops were hit by drought in June and July and by floods in the past few days.

"I doubt whether we will be able to export any rice (to other states) this year (2009-10)," Reddy said.

The rice crop in Andhra Pradesh is sown from July to mid-August and harvested in December, later than in most parts of the country. The state ranks among the top two contributors of rice to federal grain reserves.

"But we will still sell a small quantity to the (national) Food Corporation this year," Reddy said.

About 12 million tons of paddy, or unhusked rice, was harvested in Andhra Pradesh last year, of which about 70% was of the summer-sown variety.

The state consumes about 8.5 million tons of rice every year, an industry official said.

"We were facing a drought early in the season, and now we have floods...The only (consolation) is that Rabi (winter-sown rice output) is likely to be better because of the rains," said Vithal Reddy, former secretary of the Andhra Pradesh Rice Millers' Association

Prices may not rise sharply despite the floods, however, as government stock levels are comfortable, he said.

Vithal Reddy said that the summer crop in Andhra Pradesh's Telangana region may fall by about 50% from last season because of the recent flooding.

"There will be a shortfall of at least 25% (in the state's summer rice crop) compared to last year," he said.

Rice stocks of the Indian federal government were at a record high last year of more than 30 million tons. The rice harvest in fiscal 2009-10, which started Apr. 1, is expected to fall to 91 million-92 million tons from 99.15 million tons a year earlier.

India's annual rice consumption is about 85 million to 86 million tons.

"The rains may help in the second crop, which is suitable only for parboiled rice," G Nagendra, secretary of All India Federation of Rice Millers said, adding that there are surplus stocks of parboiled rice.

Parboiled rice has been soaked and steamed while still in the husk, retaining more vitamins than white rice and a more durable grain able to withstand industrial food preparation.

Source: COMMODITIESCONTROL