Home / Industry / Don’t be a wet blanket on India’s monsoon, top forecaster says

New Delhi: India’s investors would’ve been better off flipping a coin to predict the monsoon in the past decade than pay attention to the government’s forecaster.

Now they’ve got a more accurate alternative. Skymet Weather Services Pvt. Ltd, a private company, has proved more reliable than the India Meteorological Department (IMD) for the past three years in which it’s publicly released data.

That’s particularly important this year, as forecasts from both institutions differ wildly. While the weather department predicts rainfall at 88% of the 50-year average, Skymet says it will be 102%.

The outcome is crucial to predicting where inflation is headed over the next six months. A poor monsoon will add to price pressures, while sufficient rains will give central bank governor Raghuram Rajan room to cut rates.

In cutting the benchmark repurchase rate to 7.25% this month, Rajan put more weight on government projections “than the more optimistic" private forecasters. That tilted risks to his 6% inflation target to the upside.

Yet more analysts and business groups in India are doing the opposite—putting less significance on the government forecaster, known as IMD, and more on forecasters like Skymet.

“We ourselves right from the very beginning didn’t take the IMD forecast too seriously," said Jyotinder Kaur, an economist with HDFC Bank Ltd, in Gurgaon near New Delhi. “We know the IMD has only a 50% accuracy rate."

El Nino vs Dipole

The biggest difference between the two forecasts is their take on El Nino. This year’s El Nino, the first since 2010, has strengthened and is showing characteristics similar to the 1997-1998 event—a year when India’s monsoon was normal.

While IMD says El Nino will curb rainfall, Skymet sees the opposite. Back-to-back droughts are very rare, with only three in the past 100 years, the forecaster said.

Something called the Indian Ocean Dipole, the difference in the surface temperature between western and eastern parts of the sea, will neutralize the adverse effect of El Nino, G.P. Sharma, a Skymet vice president, said by phone.

“We stick to our forecast," he said on 22 June. The Indian Ocean Dipole is neutral, and there’s no sign it will turn negative, which would be detrimental to the monsoon, he said.

So far, Skymet is on pace to beat out IMD for a fourth straight year. Precipitation since the beginning of the month was 24% above normal, IMD said on Wednesday, underpinning a 10% gain in the benchmark S&P BSE Sensex over the past two weeks.

Early days

“Thus far, fortunately for us, the monsoon has been quite strong," Rajan said in Stockholm on 24 June. “We have a wide variety of forecasts as to the eventual strength of the monsoon, and that’s something we’ll need to wait and see."

It’s still early days. June accounts for 18% of total monsoon rainfall, with the bulk coming in July and August.

Of the past 10 El Ninos, seven resulted in droughts in India. The latest was in 2009, when rice and oilseed harvests fell 10% as rainfall was the least in almost four decades. IMD failed to predict that one.

The weather department says it will review this year’s forecast again at the end of July.

“There is any possibility it can be totally wrong, but at this point in time as far as we are concerned we don’t like to revise our forecast," L.S. Rathore, IMD’s director general, said on 23 June. “We have confidence in our July and August forecast." Bloomberg

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