July 4 (Bloomberg) -- The chances of a drought in India, the world’s second-biggest rice and sugar producer, are rising as monsoon rainfall is seen the lowest in five years, according to Skymet Weather Services.
The odds of a drought are 60 percent now, compared with 25 percent in April, Skymet’s Chief Executive Jatin Singh told reporters in New Delhi today. Monsoon, which accounts for more than 70 percent of the annual rainfall, will be 91 percent of a 41-year average of 89 centimeter (35 inches) this year, he said. That will be least since the 78 percent in 2009, according to data from Skymet, a private forecaster.
Showers in June were the lowest since 2009, delaying sowing of crops from corn to lentils and soybeans and threatening to stoke food prices in Asia’s third-largest economy. An estimated 833 million people out of the 1.2 billion population depend on agriculture for their livelihood and the sector accounts for 14 percent of the nation’s gross domestic product.
“Both acreage and production will be less in many crops,” Harish Galipelli, head of commodities and currencies at Inditrade Derivatives and Commodities Ltd., said by phone from Hyderabad. “While domestic stockpiles of rice, wheat and sugar are at comfortable levels, there will be problems in oilseeds and pulses.”
Monsoon crop area has declined 35 percent to 13.1 million hectares (32.4 million acres) as of June 27 from a year earlier after rains were delayed over most of India, according to Agriculture Ministry. Rainfall in June was 43 percent less than the average between 1951 and 2000, according to the India Meteorological Department.
El Nino Impact
Even if rainfall returns to normal, it won’t be enough to bridge the deficit, Singh said. A warming of temperatures in the Pacific Ocean, typically associated with an El Nino, is the main reason for below-average rainfall, he said. The nation may get 93 percent of an average 28 centimeter rain in July and 98 percent each in August and September, he said.
Climate models indicate an El Nino is likely to develop by spring, which starts in September, and there’s a 70 percent chance of the pattern this year, Australia’s Bureau of Meteorology said on July 1.
El Ninos, caused by the periodic warming of the tropical Pacific, occur every two to seven years and are associated with warmer-than-average years. The last El Nino was from 2009 to 2010, and since then the Pacific has either been in its cooler state, called La Nina, or neutral.
Rainfall was 22 percent below the 50-year average in 2009 in India, reducing food-grain output and more than doubling inflation from the previous year, official data show. The seasonal showers are the main source of irrigation for the nation’s 263 million farmers because about 55 percent of crop land is rain dependent. Monsoon rainfall will be 7 percent below average this year as the El Nino emerges, the meteorological department predicts.
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