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India set to receive average monsoon rains, in boost for poll-bound Modi

Reuters  |  NEW DELHI 

By and Mayank Bhardwaj

NEW (Reuters) - is likely to receive average rains in 2018, the the state-run Meteorological Department said, raising the possibility of higher farm and economic growth in Asia's third-biggest economy, where half of the farmland lacks irrigation.

rains, the lifeblood of the country's $2 trillion economy, are expected to be 97 percent of a long-term average, K.J. Ramesh, of IMD, told a conference.

"We see very less probability of a deficit monsoon," Ramesh said on Monday.

Other than lifting farm and wider economic growth, a spell of good rains will keep a lid on inflation, to bring forward due in May 2019.

India's weather office defines average, or normal, rainfall as between 96 percent and 104 percent of a 50-year average of 89 cms for the entire four-month season beginning June.

"The moderate La Nina conditions developed in the equatorial Pacific during last year started weakening in the early part of this year and currently have turned to weak La Nina conditions," said in a statement.

La Nina is a weather pattern that brings equatorial temperatures, rainfall patterns and closer to average.

The latest forecasts from global models indicate conditions over the Pacific will turn neutral before the beginning of season, the said.

Good rains will spur the planting of crops such as rice, corn, cotton and soybeans, accelerating economic growth that rose 7.2 percent in the December quarter, its fastest in five quarters, compared with China's 6.8 percent in that quarter.

Growth in the December quarter restored India's status as the world's fastest growing major economy.

RURAL INCOME

Average rains, with good distribution in July and August would support rural demand, said Rupa Rege Nitsure, at L&T Finance Holdings, a Mumbai-based company.

Good rains boost rural incomes, lifting the demand for an array of consumer goods ranging from lipsticks to refrigerators.

An average would keep lower, Nitsure said.

On Monday, government data showed India's fell 0.07 percent in March 2018 from a year earlier.

India's weather office will update its forecast in June.

On an average, the has forecast accurately only once in every five years over the past two decades, even after taking into account an error band of plus or minus 5 percentage points.

Rains usually lash state on the south coast around June 1, and cover the whole country by mid-July. Timely rains trigger planting of crops such as rice, soybeans and cotton.

The usually covers the half of the country in the first 15 days. The rains reach central India's areas by the third week of June and western cotton-growing areas by the first week of July.

Good rains would help boost output which in turn could cut expensive by India, the world's biggest importer of edible oils, which is the third-biggest import item after and gold.

Currently is struggling with huge amounts of sugar and good rains could further bump up the supply of the sweetener.

"A good will help bring down edible oil imports, but it could also create a problem of plenty in pulses and sugar," said a with a global trading firm.

Average rainfall will help retain its position as the world's top rice exporter.

(Reporting by and Mayank Bhardwaj; Additional reporting by and in and Manoj Kumar in NEW DELHI; Editing by and David Evans)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 18:22 IST
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