"The slow progress of the monsoon and its poor performance during the first quarter of the monsoon season (June-September) is causing serious concern among farmers as well as the (Indian) government," said a report by the USDA attache in New Delhi.

"The window of opportunity for planting most kharif crops (rice, coarse grains, soybeans, peanut, cotton and pulses) will be over by mid-July. If rains come in the next week, planting operations will pick up," the report said.

"Otherwise, the country could be heading for a severe drought," the report added.

Attache reports are not official USDA data.

In Australia, a scientist said India's monsoon will remain weak, according to the Madden-Julian Oscillation index, which gauges the eastward progress of tropical rain.

India's monsoon rains have now covered all of the country, but the country's Meteorological Department said last week that as of July 1, the rains were 29 per cent below normal.

Some weather experts have already raised the possibility that the formation of an El Nino weather anomaly in the equatorial Pacific Ocean may have led to a weakening of the annual Indian monsoon rains.

Those rains are a lifeblood for India's farming sector. The country is one of the world's biggest producers and consumers of everything from sugar to soybeans.

Worries that India's sugar production may be hit by the faltering monsoon is a prime reason why sugar values have rallied to a three-year top in the New York raw sugar market.

"Since the beginning of the monsoon season on June 1, rains have been consistently below normal in almost all parts of the country with the deficiency widening with each passing week," the attache's report said.

It added that this drought could be worse than the one that struck in 2002, which caused significant crop losses.