April 20 (Bloomberg) -- Monsoon rainfall over South Asia will be normal for a third year this season, potentially increasing plantings of rice, soybeans and sugar cane, boosting global food supplies, regional forecasters said.
El Nino weather conditions, which can parch parts of Asia, may emerge only in the later part of the June-September monsoon season and most forecasts indicate neutral conditions and normal rains, the South Asian Climate Outlook Forum said in a statement in the western Indian city of Pune today.
Farmers in South Asia may plant more of rice, corn, sugar cane and cotton on normal showers, helping India sustain exports and ease global food prices that the United Nations estimates advanced for a third month in March. The monsoon season is vital to India, Pakistan and Sri Lanka, where farming is a key contributor to economic growth.
A normal monsoon “is more important for inflation as we see food prices have started rising again,” said Sonal Varma, an economist at Nomura Holdings Inc. in Mumbai. “If you have a normal monsoon it will stabilize food prices.”
The benchmark wholesale-price index rose 6.89 percent in March from a year earlier, exceeding the median 6.65 percent estimate in a Bloomberg News survey. While Indian inflation has eased from more than 9 percent recorded in most of 2011, it remains the fastest in the so-called BRIC group of largest emerging economies that also includes Brazil, Russia and China.
The Reserve Bank of India cut borrowing costs on April 17 for the first time since 2009, seeking to bolster an economy the government estimates expanded 6.9 percent in the 12 months through March, the least in three years.
Monsoon rain in India, the main source of irrigation for the nation’s 235 million farmers, was 101 percent of a 50-year average last year, boosting water levels in dams. Sowing of monsoon crops begins in June and harvesting starts in September.
“Monsoon will further have an impact on earnings of consumer goods makers,” Nomura’s Varma said.
Agriculture makes up almost 14 percent of India’s economy and a bumper harvest will boost rural incomes, lifting sales of everything from tractors to cars and televisions.
India’s output of food grains from rice to wheat, lentils and corn is estimated to climb to a record 250.4 million tons in the year ending June after a normal monsoon and cooler winter boosted yields, according to the farm ministry. The country lifted bans on exports of non-basmati rice and wheat in September after more than three years.
Sugar production in the world’s second-largest grower in the season starting Oct. 1 may at least match an estimated range of 25 million tons to 25.5 million tons this year, according to Food Minister K.V. Thomas. India will continue to export sugar for a third year, he said on April 17.
An increase in cotton output may allow India to ease curbs on exports, while higher oilseeds output may trim overseas purchases of palm oil. The South Asian nation is the world’s biggest palm oil importer and buys the cooking oil from Indonesia and Malaysia, the largest producers.
Precipitation over southern and northwest India, the nation’s main cane, cotton, coffee and rice-growing regions, may be below normal this year, while central India, which includes the top soybean-producing areas, may receive normal showers, the climate forum said.
Rainfall may be normal in Afghanistan, Myanmar and Bhutan, while showers in Sri Lanka will be below normal, the forum said. Some parts of Pakistan may get below average rains, it said.
“Emergence of weak El Nino conditions during the later part of the monsoon season may not be ruled out,” the forecasters said. “If the El Nino conditions do emerge as indicated by some models, it may have some adverse impact on the monsoon rainfall over the region, particularly during the later part of the season.”
An El Nino is the periodic warming of the Pacific Ocean surface off the western coast of South America that can disrupt weather patterns in various parts of the world.