Drought on the cards - Monsoon

The domestic economy is passing through a rough phase and hence monsoon season becomes even more crucial as a weak monsoon could have a cascading impact on inflation, rural demand and hydro electricity generation. In order to gain a more informed perspective on the progress of monsoon so far, we organized a call with Mr. Jatin Singh, a weather expert and Founder CEO of Skymet Weather Services, a pioneering private sector initiative in weather forecasting services. Below, we present a summary of the conference call and further, key excerpts: Drought seems realistic According to Skymet, drought is becoming imminent. The agency forecasts about 60% probability of a drought (20% below LPA in full season) and 90% probability of below normal rainfall (90-94% of LPA). Overall, Skymet expects a 20% below LPA season compared to 23% below LPA in 2009. The reservoir situation also looks bleak. Of the 84 reservoirs in the country, 74 are running at 40% capacity. One of the major reservoirs in Himachal Pradesh that caters to Punjab is currently running at just 17% capacity. One of the reasons for the deficient rainfall would be the high possibility of El Nino. Historical evidence suggests that in an El Nino year, there is 60% probability of drought. Indeed, in the current year, El Nino condition is evolving (not an established one), which adds to the probability of drought. Northwest India likely to be most affected Based on observations so far, Northwest region (Rajasthan, West MP, Gujarat, parts of UP) is likely to face drought. These areas are important for pulses and paddy production. Northeast region may also witness below normal rainfall, but there may not be a drought like situation. In South India, coastal areas should get decent rainfall while rainfall in interior Karnataka and Kerala may be below normal levels. Central India, meanwhile, is expected to receive near normal rainfall. Temporally, the deficit was ~30% in June while in July it is likely to be 15%. In August, Skymet expects partial recovery. Notably, July and August are critical months, contributing about two-thirds of total South West monsoon rainfall. Paddy, pulses to be impacted In terms of crops, paddy faces considerable risk because of the severe shortfall in West Bengal, Bihar and Andhra Pradesh. The deficient rain in July raises high risk to pulses (especially arhar) while among coarse cereals, bajra and maize crop also seem at risk. However, cotton and oil seed crops (except groundnut) should face no such issues.