Weak monsoon may spur up prices: Religare

There is no clarity yet on the prospects of monsoon this year, but another weak rainy season could "spur up" prices of most farm commodities, Religare Commodity Research said on Tuesday.

"IMD (India Meteorological Department) has already forecast the April-June weather to be warmer than normal with heat wave conditions over north-western and central India. There is no clarity yet on the monsoon for this year," said a press release issued by Religare Commodity Research.

"The IMD monsoon report towards end of April would thus be of tremendous importance," it said.

The overall food grain production has been adversely affected by weak monsoons in 2014 and 2015, said Religare.

"The price rise in the agricultural sector, however, had not been significant enough for most counters barring a few, like pulses. The main reason has been high stock levels from the record production in earlier years," it said.

The re-emergence of El-Nino can harm the Indian agricultural sector, it said.

El-Nino is a climate cycle in the Pacific Ocean that adversely affects monsoon arrival in India.

Agri markets are slowly firming up over the last few weeks despite Rabi crop arrivals, Religare noted.

"Water levels have fallen to very low in many parts of India due to lack of rains. Drought like situation is reported from many areas in central India."

"The west and south zones too face severe water shortage with major dams reported at very low capacity," it added.