Monsoon in India set to be worst in 3 yrs

Monsoon, which brings more than 70 per cent of India’s rain, is set to be less than normal in the whole season for the first time in three years, hurting crops and boosting food costs in the country.

Rainfall may be “approximately” 92 per cent of the 50-year average from June to September, D S Pai, head of long-range forecasting division at the weather bureau, said on Tuesday. That’s less than the 96 per cent predicted in June. The bureau defines normal rainfall as 96 per cent to 104 per cent of the average received between 1951 and 2000.

Prime Minister Manmohan Singh is betting on sufficient rain to harvest record amounts of food grain for a third year to cool inflation that exceeded seven per cent for a fifth straight month in June. Less than normal rain may curb exports of rice, wheat, sugar and cotton and increase imports of cooking oils. The country is the world’s second-biggest grower of wheat, rice and sugar, and the largest buyer of palm oil.

“The risk from the monsoon has clearly risen and if this pattern continues then both growth and inflation will be adversely impacted,” Dharmakirti Joshi, Mumbai-based chief economist at Crisil Ltd, the local unit of Standard & Poor’s, said. “Oilseeds, pulses and coarse cereals, which are rain dependent, have been the worst impacted.”

Monsoon rain was 22 per cent less than average in the June 1-July 23 period, the weather office said yesterday.

More than 235 million farmers depend on the monsoon for crops such as rice, peanuts, soybean and cotton.

290,000 tonnes more sugar released
The government on Tuesday decided to release 290,000 tonnes of more sugar in the open market to control the sweetener's price that has risen by Rs 3 a kg in a fortnight. “Sugar prices are rising. We are taking steps to control the price,” Food Minister K V Thomas told reporters.