Monsoon Rain Seen Normal in India to Increase Planting, Exports.

India, the world’s second-biggest rice, wheat and cotton grower, may get normal monsoon rainfall for the third time in four years in 2013, potentially boosting plantings and exports.

“The monsoon is likely to be normal because this is an El Nino neutral year,” said Jatin Singh, chief executive of Skymet Weather Services Pvt. The chances of a drought are only 4 percent, said Singh, who correctly predicted a drought in 2009. El Nino is a warming in the Pacific Ocean, which can parch Asia and bring cooler weather to the U.S. The India Meteorological Department will issue its first monsoon forecast next month.

A normal monsoon is critical to Prime Minister Manmohan Singh’s efforts to galvanize economic growth as 55 percent of the nation’s agricultural land does not have access to irrigation.

The economy will expand 5 percent in 2012-2013, the least in a decade, according to government. Agriculture accounts for about a fifth of the economy and bigger harvests may help cool the highest food inflation among major economies and sustain exports of rice and wheat.

“Monsoon is always a prerequisite for getting a minimum growth in the economy,” Madan Sabnavis, chief economist at Credit Analysis & Research Ltd. (CARE), said in a phone interview from Mumbai. “The situation is as critical as last year, when India had to face low demand and high inflation.”

The weakest monsoon in three years in 2012 parched parts of Maharashtra, Karnataka and Gujarat states, cutting harvests of sugar, cotton and rice. The agriculture sector is set to expand 1.8 percent this year, the least in 3 years, according to the government’s annual Economic Survey.
Food Inflation

India’s more than 235 million farmers depend on rain for irrigating crops such as rice and cotton. The sowing of monsoon crops begins in June and harvesting starts in September.

“Food inflation has always been a main concern, having a normal monsoon is definitely a necessary condition for inflation to be under control, though by itself cannot be sufficient,” Sabnavis said. While there hasn’t been a nationwide drought in the past two decades, patchy rains always drive up prices of specific commodities, he said.

The correlation between the monsoon and El Nino conditions is very strong, Skymet’s Singh said. “There is a 60 percent chance of a drought in an El Nino year.”

Model forecasts and expert opinion suggest that the likelihood of El Nino or La Nina conditions developing during the first half of 2013 is low, and neutral conditions are likely to be maintained through the boreal spring, the World Meteorological Organization said in a statement on March 11.
Below Average

“We will forecast our estimate next month after taking all parameters until March 31,” said D.S. Pai, head of long-range forecasting at India’s weather bureau. El Nino conditions may stay neutral, he said.

India received only 92 percent of the 50-year average of 887.5 millimeters of rain in the June-to-September monsoon season in 2012. Rainfall between 96 percent and 104 percent of the average between 1951 and 2000 is considered normal, while anything from 90 percent to less than 96 percent is classified as below-normal. Below 90 percent is a drought.

A ban on exports of sugar, rice and wheat was extended in 2009 following the weakest monsoon since 1972. Record harvests of rice, wheat and cotton in 2011-2012, following two normal monsoons, prompted the government to scrap the bans.

India may produce 110 million tons of rice in 2013-2014 if rains are normal and more farmers adopt new technologies and higher-yielding seeds, said Vijay Setia, a past president of the All India Rice Exporters Association.


Source : businessweek.com