Monsoon rain seen more than normal for third year

Written by Bloomberg | Updated: Apr 5 2012, 06:23am hrs
Monsoon rainfall in India, the worlds second-biggest producer of rice, wheat and sugar, may be more than a 50-year average for a third year, potentially helping the nation curb food prices and sustain exports.

Rainfall in the June-to-September season may exceed the average of 89 centimeters (35 inches) according to the so-called coupled forecast model, Indian Institute of Tropical Meteorology director B N Goswami, said.

The strength of the monsoon helps to shape countrys economic prospects, with agriculture making up about 15% of Asias third-largest economy. Goswamis institute is among those from across the country that feed data and projections to the India Meteorological Department, which is scheduled to release its forecast for this season in the fourth week of April.

A good monsoon will boost overall farm growth and the economy, Anand Rathi Commodities research head Kishore Narne said. This will help India continue exports of rice, wheat, corn and sugar. It will also help control rising prices of vegetables and stabilize prices of all agricultural commodities.

Inflation was 6.95% in February, holding close to a 26-month low. It remains the fastest in the so-called BRIC group of biggest emerging economies that also includes Brazil, Russia and China. The Reserve Bank of India raised rates by a record 3.75 percentage points from March 2010 to October last year, seeking to contain price increases.

Indias economy grew at the slowest pace in more than two years in the quarter ended December as domestic demand weakened and the global recovery faltered. Gross domestic product rose 6.1% in the three-month period, the Central Statistical Office said on February 29.

Rainfall from last years monsoon was 101% of the 50-year average, boosting water levels in dams. That helped India produce a record 250.4 million tonne of grain in the year ending June 30, prompting the government to scrap a ban on exports of non-basmati rice and wheat.

The country will remain a net exporter of sugar for a third year in 2012-2013 as supplies exceed domestic demand, the Indian Sugar Mills Association said. The country expects to have enough grain for exports till 2014, Food Minister KV Thomas said on March 21.

Sowing of monsoon crops starts in June and harvesting starts in September. The monsoon typically begins in the southern state of Kerala by the first week of June, before blanketing the entire country by July 15.

Although a weak El Nino may develop in the later part of the season, the experimental dynamical model still shows monsoon is more likely to be on the positive side of normal, Goswami said. The El Nino weather phenomenon, characterised by a warming of the equatorial Pacific, brings increased rain to South America and drought or reduced rainfall in Asia.

Indias 234 million farmers rely on monsoon rainfall to water rice, sugar cane, soyabean and lentil crops. The rains also help replenish reservoirs, allowing farmers to use the water to cultivate wheat and oilseeds.

First official forecast in last week of April

India will issue its first official forecast for the June to September monsoon rains in the last week of this month, the director general of the India Meteorological Department said on Wednesday.

Monsoon rains are a key factor for global commodities markets as they influence output of various crops.