Monsoon covers all India, brightens crop outlook

Monsoon covers all India, brightens crop outlook

New Delhi: India’s annual monsoon, crucial for a rebound in farm output after last year’s drought, has rapidly advanced to cover the entire country, boosting crop sowing and likely tempering food price inflation.

The weather office has forecast widespread rains in the cane- and rice-growing regions in the north and in the oilseed-growing areas in the central and western parts of India.

Rainfall was 16% below normal in June, when the monsoon did not advance beyond central India for two weeks, but heavy showers in the past week have narrowed the deficit to 13%.

“The monsoon has covered the entire country by about nine days ahead of schedule," said B.P. Yadav, director at the India Meteorological Department.

The revival of monsoon rains, the main source of water for 60% Indian farms, will lift soybean and groundnut crops in the world’s top vegetable oils importer and help the cane crop in the Uttar Pradesh state, which produces half the cane in the world’s top sugar consumer.

The weather office expects total June-September rainfall to be normal despite the June deficit.

But forecasters and analysts said the rapid progress of rains in recent days was not too significant, because last year the monsoon had covered the entire country by 3 July and India still face the worst drought in 37 years.

“It’s too early to say that the entire season will have a normal monsoon," said D.K. Joshi, principal economist at CRISIL, a rating agency. “The development is positive and it will at least curb inflationary expectations on food," he said.


Last year’s draught has led to a surge in food prices, with the headline inflation rate hitting above 10% in May and prompting the central bank to raise interest rates by 25 basis points in a inter-meeting move on Friday.

High inflation has also triggered a series of protests including a successful national strike against high prices that has rejuvenated India’s opposition.

The shortfall in monsoon rains since June 1 had narrowed to 13% after five days of heavy rainfall, data from the weather office showed on Monday.

The weather office expects rainfall to improve.

“We expect progressively higher rains this season. Even rains in October could be higher this year," said L.S. Rathore, head of the agricultural meteorology division of the India Meteorological Department.

Monsoon rains, which deliver 75-90% of the country’s rainfall, are forecast to be at 102% of the long-term average.

“Good rains now will speed up sowing of summer crops. Monsoon revival over central India will expedite sowing of soybean," he said.

Forecasters expect heavier rains towards the end of the monsoon season due to developing La Nina conditions.

“We feel La Nina conditions are developing and the monsoon is shaping up well," said D. Sivananda Pai, director at the western city Pune-based National Climate Center, said.

The government is watching the progress of monsoon before taking key decisions such as easing export curbs on rice and wheat, lifting the ban on sugar futures and imposing a tax on sugar imports.

“Monsoon distribution holds the key to everything," said Veeresh Hiremath, a senior analyst with the Hyderabad-based brokerage Karvy Comtrade.