Private weather forecaster Skymet has said that it continues to remain cautiously optimistic on monsoon and said chances of EL Nino disrupting monsoon remains. It further added that it is seeing irrational exuberance on monsoon. The weather forecasting agency had in April predicted monsoon to be slightly below normal this year.
“I am cautiously optimistic but I need more data – which will come between a week and 10 days – to take a better call,” Skymet CEO Jatin Singh told Reuters.
“Easing of El Nino is a good sign, but need to wait to see through the data. Evolving El Nino can also create disruption for the monsoon,” Skymet told ET Now. It further added that it is accounting normal monsoon in the forecast and continue to maintain outlook for now.
On Tuesday, Indian Meteorological Department (IMD) predicted monsoon to be ‘normal’ this year and bring 100 per cent rainfall instead of 96 per cent as forecasted earlier. It further added that prospects of the monsoon have brightened because of the reduction in the likelihood of El-Nino.
Reacting to the normal monsoon, domestic stock markets rallied and touched their record high on Wednesday and Thursday. If normal monsoons happen, it would mean better rainfall, which will help in higher farm output, leading to higher rural wages and drive consumption on the rural side. This will help in driving topline growth and consequently corporate earnings growth, thereby providing the fundamental support to the upward trend in the markets.
While revising the monsoon forecast, IMD had said that Australia’s Bureau of Meteorology also has downgraded the occurrence of El-Nino this year and this improve prospects of monsoon improving slightly. IMD, however, denied the possibility that monsoon would be above normal this year.
Anything between 96 and 104 per cent of the LPA is considered as “normal”. Anything under 96 per cent is considered as “below normal” and 104-110 per cent of the LPA as “above normal”.
El Nino- a phenomenon associated with warming of Pacific waters- is being attributed as the key reason behind a weak monsoon. Dipole (IOD) could help in tempering the adverse impact of El Nino.
With agency inputs