The official 4 month monsoon season ends today and the rains will withdraw across India over the next 3 months. Though monsoon statistics are usually focused on the 4 months from June to September, many parts of the country get significant rainfall during the withdrawal. For example the South-East coast will get significant rainfall during December. The entire monsoon cycle lasts about 7 months and the withdrawal has started. Over the 4 months rainfall has been 5% higher than the long term average and this would class this monsoon as a good monsoon.
Conventional wisdom has it that a “good” monsoon year adds 2% or more to GDP growth while a “bad” monsoon (>15% less than the long term average) can reduce the GDP growth by over 2%. Many industries are directly affected by agricultural growth. Not only fertlisers and pesticides but even farm vehicles and equipment. A good monsoon even impacts consumer goods which the rural population are waiting to get their hands on. With the slowdown in the economy many in the now lame-duck government are hoping for a monsoon boost without any action on their part and in time for the benefits to show before the general election next year. In any event, the monsoon or divine intervention cannot be blamed by ineffective politicians seeking reelection. But there is little doubt that a good monsoon has an enormous “feel-good” effect.
The monsoon is now withdrawing – perhaps a week or so behind its normal schedule (which means that some precipitation will continue to occur in Central India after the official season is over).
Withdrawal of 2013 monsoon September 30th source IMD
Crop yields are expected to be at record levels after this good monsoon.
Reuters: Grains production this summer is likely to be just short of an all-time high, according to a preliminary government forecast on Tuesday, leaving plenty for exports and helping to boost growth and trim inflation ahead of elections due by May. A heavy monsoon has ensured bumper harvests even though rice output could be lower than last year as rains were patchy over the rice-growing areas of some eastern states. The monsoon waters 55 percent of farmland without irrigation.
“Growth in agriculture … will rebound this year because rains are good,” Agriculture Minister Sharad Pawar told reporters as he announced the output forecast, which is usually conservative. “Today’s estimates are the first projections for 2013/14 and invariably we have seen that final estimates are 5-10 percent higher than the first estimate,” Pawar said.
Total output of summer-sown grains is likely to be 129.3 million tonnes in the current crop year from July, Farm Commissioner J.S. Sandhu said on Tuesday, just below the record 131.3 million tonnes of 2011/12 and up 0.9 percent on last year. Bumper output should mean India can continue exporting crops such as cotton, corn, rice and sugar.
Output of oilseeds, which could trim India’s imports of edible oils, should rise around 15 percent. Production of lentils – another foodstuff that India imports – should be up 3.2 percent.
Rice production is seen at 92.3 million tonnes against 92.8 million tonnes in the previous year. That marginal fall in rice output is not a great concern as India’s stocks are 21 million tonnes, more than double its target for September 1.
The government is relying on a bumper harvest to push agricultural growth and help the wider economy, as well as provide ample supplies of rice and wheat to support food subsidy programmes and cool double-digit food inflation. ……
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