Stronger El Nino dims monsoon prospects

The southwest monsoon may face stronger-than-expected El Niño conditions that could result in weak rainfall, reduced crop output, and implications for the overall Indian economy.

In its monthly outlook, the US National Oceanic Atmospheric Administration (NOAA) said El Niño conditions associated with the warming of sea surface temperatures in the Pacific Ocean are expected to gradually strengthen into the winter, triggering concerns over extreme weather events worldwide and a weak monsoon in India.

“Depending on its strength, El Niño can cause a range of impacts, such as increasing the risk of heavy rainfall and droughts in certain locations around the world,” said Michelle L’Heureux, a climate scientist at the Climate Prediction Center, a scientific office within NOAA that monitors climate variability and change. “Climate change can exacerbate or mitigate certain impacts related to El Niño. For example, El Niño could lead to new records for temperatures, particularly in areas that already experience above-average temperatures during El Niño.”

A single El Niño event may not result in all these impacts, but El Niño increases the odds of them occurring, she added.

For India, rainfall in the June-September monsoon season brings over a third of the country’s annual rains, which are crucial for agriculture and replenishing reservoirs and aquifers along with meeting power demand. Over half of India’s arable land is rain-fed, and agriculture is among the biggest employment generators. Policymakers keep a watch on the monsoon and global factors like El Niño for intervention, if needed.

“If El Niño materializes and affects the Indian monsoon in FY24, it will have an impact on multiple sectors, apart from agriculture and may lead to a downward revision of growth estimates, profitability, and also deterioration of leverage ratios and higher import dependency,” rating agency Icra had said in its report on sectoral outlook on El Niño impact in May.

While the impact of a slight delay in monsoon would not be material, the occurrence of an El Nino may impact agricultural output and rural income, it said, noting that impact will be stronger on sectors that are dependent on agricultural output, such as edible oil, sugar, cotton spinning mills, and those that derive a significant portion of their demand from rural income, for example, tractors, two-wheelers, and cement.

“Probability (of El Nino impact) is there and has the potential to affect the Deccan area. Pulses, cotton, and oilseeds are vulnerable. There’s a need to see the arrival (of monsoon) on the west coast and the progress of rains,” said Madan Sabnavis, chief economist at Bank of Baroda.

The department of economic affairs cautioned in its monthly economic report in April that uncertain weather conditions, besides global factors, would be potential risks to India’s economic growth and inflation. “Prices of commodities sensitive to El Niño effects, such as coffee, rice, palm oil, and natural rubber, need to be continuously monitored,” it said.

In the past, India witnessed below-average rainfall during most El Nino years, sometimes causing severe droughts, which destroyed crops and forced authorities to limit the exports of some grains.

At the beginning of this year, an El Niño was predicted to develop in the second half of the southwest monsoon season in India, meaning by August. The IMD also suggested that due to El Niño, India’s northwest could see below-normal rainfall at 92% of the long-period average (LPA) during the June-September season.

Nine monsoon seasons of 15 El Niño years in the 1951-2021 period recorded deficient rain. This indicates there is a correlation between El Niño and poor rainfall in India. The last time the world saw its hottest year on record in the presence of El Niño was in 2016.

Besides a stronger El Nino, severe cyclonic storm Biparjoy over the Arabian Sea could further impact the monsoon’s advancement. Biparjoy is expected to intensify gradually over the next 36 hours and move nearly north-northeastwards in the next two days and north-northwestwards during the subsequent three days, IMD said on Friday. This may lead to the monsoon being weak for another week, it noted.