Break In Monsoon Rain May Spell Trouble For Crop Output

Residential buildings in Cuffe Parade are seen from Marine drive in Mumbai, India, on Tuesday, July 14, 2020. Photographer: Dhiraj Singh/Bloomberg

Break In Monsoon Rain May Spell Trouble For Crop Output

After a strong start, progress of the southwest monsoon has slowed, impacting sowing to some extent. The progress of rainfall over the July-August period is now critical to ensure that crop output is not impacted, economists said.

A hiatus in the advance of southwest monsoon has been observed after June 19, 2021, which has continued till July 7, 2021, according to an update by the India Meteorological Department dated July 8. "Since the prevailing meteorological conditions and large-scale atmospheric features remained unfavourable, further advance of southwest monsoon has not taken place in this week too," the press release said.

As such, rainfall across the country as a whole was at 46% below the long-period average, during the week, the release said. For the season so far, cumulative rainfall is 5% below the long-period average till July 7 for the country.

So far, the monsoon has been deficient in parts of Kerala, Punjab, Gujarat, Rajasthan, Himachal Pradesh, Odisha and parts of the northeast.

Sowing has already taken a hit. Area sown so far was 21.6% lower at 202.72 lakh hectares, according to data available till June 25, 2021. With the monsoon in a lull since then, it is expected to have fallen further in comparison to sowing the year before.

With the monsoon slowing, many state governments have urged farmers to delay sowing of the kharif crop this season, said a research note by Barclays dated July 4. As a result, crop sowing is off to a slow start this year, it said.

Sukhpal Singh, professor and chairperson at the Centre for Management in Agriculture, at IIM-Ahmedabad, said sowing is slower but this has largely impacted north India where sowing is done a little earlier. That said, delayed or erratic monsoons have been shown to adversely impact farmer incomes and yields as farmers are forced to spend more on the cost of irrigation then, he said.

Reservoir Levels

The monsoon rainfall is also critical for water reservoir levels. This has held up so far.

The total live storage in 130 important reservoirs in different parts of the country is 1% lower than last years at 55.6 billion cubic metres, according to data for the week ending July 1, monitored by Central Water Commission.

With dry spell continuing, reservoir storage levels could dip a bit, Barclays said.

A robust spell of monsoon in June, amid adequate water level in reservoirs, accompanied by easing of lockdown restrictions related to agriculture operations in most states, augurs well for sowing momentum in July, stated a note by QuantEco research dated June 27, 2021. However, the duration of the current monsoon break will need to be watched, it said.

July accounts for 60% of season’s sowing activity and rainfall in this month is critical for yields and productivity of crops, the note by QuantEco research said. Last year, after recording a surplus of 17.6% in June 2020, rainfall had swung into a deficit of 9.9% in July, in turn weighing on the pace of sowing, it said.

The distribution of rainfall, especially in northwest and central India, will also need to watched. Both these regions together account for nearly 60% of India’s food grain production, according to QuantEco.

To be sure, the IMD currently forecasts revival of the Southwest monsoons in the current week. "Prevailing meteorological conditions, large-scale atmospheric features and dynamical models suggest revival of monsoon over south and east central India from July 8, and over northwest and central India from July 10," it said in the note on Thursday.

A good monsoon is important for agricultural output and inflation.

Already, retail inflation was recorded at 6.3% in May, exceeding the Monetary Policy Committee's upper bound of 6%. It is estimated to remain above the band in June as well. A normal monsoon will help rein in food prices, bringing down inflation in food and beverages. "A normal southwest monsoon along with comfortable buffer stocks should help to keep cereal price pressures in check," the MPC said in its last resolution in June.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.