Indian sugar mills association

India seen forecasting normal monsoon

Date:	22 Apr 2014

Source:	The Live Mint

Reporter:	Prabhudatta Mishra & Pratik Parija

News ID:	3249

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New Delhi: The monsoon in India, which provides more than 70% of annual rainfall, will be normal this year amid forecasts for the emergence of an El Nino that previously caused droughts, government officials said.

Rain may be 96% of a 50-year average of 89 centimetres (35 inches) in the June-September period, said two officials with direct knowledge of the matter, requesting not to be identified before an announcement by India Meteorological Department on 24 April. Actual rainfall may be 5% more or less than the prediction, the officials said.

The monsoon is the main source of irrigation for the country’s 235 million farmers and planting of crops from rice to sugar and soybeans are dependent on timely arrival of the seasonal rains as more than 50% of farm land is rain-fed. Agriculture represents about 14% of Asia’s third-largest economy, where consumer price inflation averaged 10.07% in 2013.

“In case of a bad monsoon food inflation number will further go out of hand,” Madan Sabnavis, an economist at Credit Analysis & Research Ltd. in Mumbai, said by phone. “In which case, the Reserve Bank of India’s (RBI) ability to lower the interest rates will become very much limited.”

Elevated inflation has prompted RBI governor Raghuram Rajan to raise the benchmark rate 75 basis points since taking over at the central bank in September. Risks to inflation arise from guaranteed prices for farm products, higher energy costs and government spending on subsidies, according to Rajan. There is also a threat from less-than-normal monsoon rains due to possible El Nino effects, he has said.

Inflation Worries

The consumer-price index accelerated 8.31% in March from a year earlier, quickening for the first time in four months, according to the Central Statistics Office (CSO). The economy grew 4.9% in the year ended 31 March, after decade-low growth of 4.5% the prior year, the ministry of statistics and programme implementation estimates.

The India Meteorological Department will issue a detailed monsoon forecast in June after this month’s first long-range prediction, the officials said. Showers between 96% and 104% of the average are considered normal by the department. B.P. Yadav, a spokesman of India Meteorological Department, declined to comment.

El Nino Odds

Signs have been detected that El Nino is imminent, presaging changes to global weather patterns in the months ahead, the World Meteorological Organization said last week. The chances that an El Nino will develop are growing, the US Climate Prediction Centre said this month, boosting the odds to 65% from 52%. The probability is over 70%, Australia’s Bureau of Meteorology said on 8 April.

El Ninos occur irregularly every two to seven years and are associated with warmer than average years. They tend to lead to abnormally dry conditions over parts of Australia, the Philippines and Brazil, and to more intense storms in the Gulf of Mexico. Their counterpart, La Ninas, are associated with cooler years.

India received normal or more-than-normal rains during only three El Nino years out of the past 10 occurrences while the remaining were drought years, according to data from the meteorological department. Monsoon rainfall was the least in almost four decades in 2009, when El Nino occurred last, data show. Rice and oilseed harvests fell 10%, according to agriculture ministry data.

Production of food grains from rice to wheat, lentils and corn is seen at a record 263.2 million metric tonnes in the year ending June after more than normal monsoon and cooler winter boosted yields, according to the ministry

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