India expects normal level of monsoon rainfall

New Delhi/Mumbai — India is likely to receive normal monsoon rainfall in 2023, the state-run weather office said on Tuesday, the fifth consecutive year of normal or above-normal summer rains that spur farm and overall economic growth in Asia’s third-biggest economy.

A spell of good rains could lift farm and wider economic growth and help bring down food price inflation, which jumped in recent months and prompted the central bank to raise lending rates.

Ample farm production could allow India to lift curbs imposed on exports of sugar, wheat and rice. India is the world’s second-biggest producer of those three staples, and the biggest importer of palm oil, soybean oil and sunflower oil.

The rains, which usually lash the southern tip of Kerala state from about June 1 and retreat by September, are expected to come to 96% of the long-term average in 2023, said M Ravichandran, secretary at the ministry of earth sciences.

The India meteorological department (IMD) defines average, or normal, rainfall as ranging between 96% and 104% of a 50-year average of 87cm for the four-month season.

Private weather forecasting agency Skymet forecast on Monday that India could get below-normal monsoon rains in 2023, with an increasing likelihood of El Nino, which typically brings dry weather to Asia. However, IMD director-general Mrutyunjay Mohapatra said El Nino could affect monsoon rainfall in the second half of the season, but other factors — such as sea temperature changes known as the Indian Ocean Dipole — favour good rainfall.

“All El Nino years are not bad monsoon years. About 40% of the El Nino years in the past were years with normal or above-normal monsoon rainfall,” Mohapatra said.

For the first time in more than two decades, India would experience average or above-average rainfall for five consecutive years, IMD data showed.

El Nino weather is unlikely to have any effect on the production of summer-sowed crops and there is no need to worry about the sowing pattern, Ravichandran said. But below-normal monsoon rainfall could have a “significant impact” on India’s inflation, which the central bank and federal government have been trying to bring down, said Rajani Sinha, chief economist at CareEdge.

“The impact would be compounded on the back of existing macro [economic] conditions in India, wherein food, cereal and milk inflation is elevated, inflationary expectations are high, and core inflation continues to stay higher,” Sinha said.

The government is unlikely to change export policies before farmers harvest another bumper crop in the 2023/24 cycle, starting from June, said a Mumbai-based dealer with a global trading firm.

Mohapatra warned that cotton, soybean and sugar cane growing areas in the central and western parts of the country could receive normal to below-normal rainfall.

Reuters