India's below-normal July monsoon forecast risks Kharif crop outlook

By Pratik Parija, Mary Hui and Rajesh Kumar Singh

 

India is likely to receive below-normal rainfall in July, the monsoon’s wettest month, after its driest June in 12 years, threatening to further delay crop planting across large parts of the country.

 

July rainfall is expected to be less than 94% of the long-term average of about 28 centimeters, largely due to the emergence of an El Niño weather pattern in the Pacific Ocean, Mrutyunjay Mohapatra, director general of the Indian Meteorological Department, said at an online briefing Tuesday. India received nearly 40% less rainfall than normal last month, making it the most arid June since 2014.

 

The monsoon delivers the bulk of India’s annual rainfall, replenishing groundwater reserves and supporting agricultural activity. Below-normal precipitation has in the past prompted authorities to restrict exports of key farm commodities to secure domestic supply. In May, the government banned sugar exports through Sept. 30.

 

Deficient rains are unlikely to be “a big problem” for staples, but they raise concerns over oilseeds crops and vegetable price inflation, said Teresa John, economist with Nirmal Bang Equities Pvt Ltd.

 

July is the main planting month for monsoon crops such as rice, soybeans, cotton and pulses. Poor precipitation has so far disrupted sowing. The latest forecast by the weather bureau points to normal to above-normal precipitation in the first week of July. However, the outlook remains sensitive to rainfall distribution, as heavy downpours over a short period could also create disruptions.

 

“I want to stress that the distribution of rainfall is more important than the quantity of rainfall received” within the next three to four weeks, said Harsha Muragod, an analyst at Expana.

 

The area under monsoon-sown crops including rice, oilseeds, corn and cotton fell to 18.27 million hectares (45 million acres) as of June 25, down almost 23% from a year earlier, according to farm ministry data.

 

For Vinod Patidar, who grows peanuts, black gram and soybeans across 25 acres in the central Indian state of Madhya Pradesh, the late arrival of rains has pushed back sowing, shifting the harvest further into the season. He began planting peanuts on Monday, about two weeks behind schedule.

 

“My fields desperately need rain, and it’s all in God’s hands now,” Patidar said. “We’re already running late.”

 

India has identified 315 districts vulnerable to below-normal rainfall, including 111 high-priority areas with limited irrigation, the farm ministry said this month after a review held by Agriculture Minister Shivraj Singh Chouhan. Contingency plans will guide crop choices, water use and emergency measures across 12 states, including Madhya Pradesh, Maharashtra, Gujarat, Uttar Pradesh, Karnataka and Andhra Pradesh.

 

The Finance Ministry has flagged the monsoon rainfall deficit as a concern for the economy. “Among the many things India needs to build buffers for in the coming years, water may be at the top of the list,” the ministry said in its June monthly economic review.

 

Scant rains have kept the weather hot in many parts of the country, boosting demand for electricity, cooling and irrigation, an activity that farmers carry out after sunset to avoid the heat. That has kept evening power demand elevated. As a result, evening supply shortfalls have returned after a brief early-June respite.

 

Heat waves are a major driver of electricity demand in India, but lack of rain can cause unusual consumption surges during the monsoon months. In 2023, the nation witnessed that year’s highest power demand in September, as a result of weak rains.