Skymet forecasts normal monsoon this year

[ad_1]

Rainfall during the four-month monsoon season (June-September) is expected to be 102% of the long-period average (LPA) of 868.6 mm with a model error of +/-5%, Skymet said. Cumulative monsoon rains nationwide between 96-104% of LPA is considered as ‘normal’.

State-run India Meteorological Department (IMD) will release its first forecast for the 2024 southwest monsoon in a few weeks.

In its earlier foreshadowing released on 12 January, Skymet assessed monsoon to be “normal” and retains the same. 

“El Nino is swiftly flipping over to La Nina. And monsoon circulation tends to be stronger during La Nina years. Also, the transition from Super El Nino to strong La Nina has historically tended to produce a decent monsoon. However, monsoon season may start with a risk of impairment, attributable to the remnant effects of El Nino. The second half of the season will have an overwhelming edge over the primal phase,” said Jatin Singh, managing director of Skymet, referring to weather patterns that shape the seasonal rains.

Indian Ocean Dipole (IOD), another factor influencing southwest monsoon in India, is also expected to remain positive this year.

“A preliminary forecast of positive IOD this season will work in tandem with La Nina for better monsoon prospects. Also, the rainfall distribution is likely to be diverse and equitable for the season, as a whole,” Skymet said.

Last year, the monsoon ended with 6% below-normal rainfall. Monsoon is crucial for India as it delivers nearly 70% of its annual rainfall, making it important for farming. Nearly half of India’s arable land doesn’t have access to irrigation and depends on these rains to grow crops such as rice, corn, cane, cotton and soybean.

About 56% of the net cultivated area is rain-fed, accounting for 44% of food production, making rains essential for India’s food security. Normal rainfall leads to robust crop production, helping keep a lid on food prices, including vegetables.

The forecast comes at a time when El Nino caused drought and prolonged dry spells in Asia as the Pacific Ocean warmed, driving the government to tackle inflation by taking a series of preventative measures, including the launch of Bharat atta, rice and dal, and export curbs.

India’s retail inflation marginally decreased to 5.09% in February from 5.1% in January — still above the central bank’s 4% target. The period saw food and beverage prices surge above 7% for the fourth consecutive month.

The forecast also assumes significance as India’s water level in 150 major reservoirs fell to 35% of capacity as of Thursday.

“It is too early to be optimistic as arrival and spread are more important. With the present heat wave and low reservoir levels, the timing is more critical. That will affect the agri prospects and rural demand. As of now, it is a positive signal which was expected as the world over La Nina was to prevail,” said Madan Sabnavis, chief economist at Bank of Baroda.

According to the latest data from the Central Water Commission, the available water level this week in these reservoirs was 61.801 billion cubic metres (BCM), 17% lower than the corresponding period last year when it was 74.47 BCM and 2% lower than the average of last 10 years (63.095 BCM). The live storage available in 150 reservoirs as of Thursday was 83% of the live storage of the corresponding period of the previous year and 98% of storage of average of the past 10 years.

“Despite an increase in irrigation intensity, Indian agriculture has a high dependence on rainfall. This is evident from agriculture GVA (gross valur added) growth in the December quarter of 2023-24. On the assumption of normal rainfall and its spread over space and time across the country during June-September (southwest monsoon), Indian agricultural GVA is expected to grow around 3% in 2024-25,” Devendra Pant, chief economist at India Ratings, estimated.

GVA growth of agriculture and allied sectors contracted 0.8% in the October-December quarter from 1.6% growth seen in the previous quarter. This is the first time in 19 quarters that farm GVA saw a decline. The growth rate was 5.2% in the year-ago period. In FY23, agriculture GVA growth stood at 4.7%, while in the first quarter of the current financial year, it was recorded at 3.5%.

Skymet said it expects sufficiently good rains in the South, West and Northwest India. Core monsoon rainfed zones of Maharashtra and Madhya Pradesh will also receive adequate rainfall.

The eastern states of Bihar, Jharkhand, Odisha and West Bengal may get deficit rainfall during peak monsoon months of July and August. Northeast India is likely to see less than normal rains during the first half of the season.

“As the FMCG industry continues to adapt to shifting market dynamics, the prospect of a normal monsoon instills a sense of optimism. Anticipated favourable rainfall not only augurs well for agricultural output but also promises to bolster rural demand, a pivotal driver of our industry’s growth trajectory. Improving macro-indicators and the robust agricultural output growth would uplift consumer sentiments. Sectors like personal wash and home care would be potential beneficiaries,” said Aasif Malbari, CFO, Godrej Consumer Products Ltd.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.

More
Less

Published: 09 Apr 2024, 07:45 PM IST

Leave a Reply

Your email address will not be published. Required fields are marked *