“This prediction bodes well for inflation since sticky food inflation has been a bane for the past two fiscals. After the sub-par growth in agriculture GVA in fiscal 2024, normal rains this year will support agriculture growth and incomes.”
After Skymet and India Meteorological Department (IMD) predicting ‘above normal’ monsoon at the all-India level this year, CRISIL said that it bodes well for inflation since sticky food inflation has been a bane for the past two fiscals. “This prediction bodes well for inflation since sticky food inflation has been a bane for the past two fiscals. After the sub-par growth in agriculture GVA in fiscal 2024, normal rains this year will support agriculture growth and incomes,” CRISIL said in a report. Moreover, it added, normal rains will help replenish water reservoirs (currently below their normal levels) and support rabi production.
Earlier last week, Skymet said that India is expected to see a normal monsoon in 2024. Monsoon rains are expected to be 102 per cent of the long-period average of 868.6 mm for the four-month period, it had said. “El Nino is swiftly flipping over to La Nina. And, monsoon circulation inclines to be stronger during La Nina years,” Jatin Singh, Managing Director, Skymet, said in a statement.
On April 15, IMD said that India is likely to witness ‘above normal’ monsoon this year. It added that the rainfall is likely to be 106 per cent of LPA with a model error of ± 5 per cent. The cumulative rainfall is estimated at 106 per cent of the long-period average (LPA) of 87 cm, the IMD said in a release. According to the MeT department, El Niño conditions are likely to weaken further during the early part of the monsoon season. La Niña conditions are likely to develop during the second half of the monsoon season, it added.
In a report, CRISIL said that regional distribution will be a key monitorable this year given the uneven spread last year. In 2023 as well, the east and north-east received below-average rainfall, at 82 per cent of the LPA. “If this year’s prediction were to manifest, states in this region (key producers of rice, sugarcane and maize) could face yet another year of rainfall distress,” it stated.
Another monitorable, per CRISIL, is the temporal distribution of rains. This is because sowing decisions are based on rainfall arrival and its quantum. With approximately 43 per cent of India’s total cropped area rain-dependent, adequate rainfall is required in July and August, the critical months for the kharif crop. In 2023, the temporal distribution was highly uneven, with rainfall oscillating between deficit and above normal.
Source:financialexpress.com