India to get below-average monsoon in risk to economy

BLOOMBERG

India will likely see below-normal monsoon rain this year, according to a private forecaster, a prospect that could hurt its vast agriculture sector and stoke inflation in Asia’s third-biggest economy.
The coming season may bring only 94% of the rain India usually gets from June to September, Skymet Weather Services Pvt said. A lack of rain spells trouble for the economy as it might cut yields of summer-sown crops like rice and sugar cane, driving up food prices.
India — still reeling from the after-effects of last year’s tormenting heat waves that slashed its wheat output and forced it to ban some exports — can ill afford another disruption to its agricultural supplies. Unseasonable rains have already damaged the wheat crop this year. Food inflation remains elevated, straining the government’s finances and putting meals out of reach for many.
“If the next crop too suffers due to lack of rains, the economic distress will increase,” said Lakhwinder Singh, professor of Economics at Punjabi University Patiala.
“The hit to food grain production will lead to higher prices. And if India imports to meet domestic shortfall, the international rates too will rise.”
Adequate and timely monsoon showers are vital for India’s farm sector, the main source of livelihood for some 60% of its population and which accounts for about 18% of the economy. The India Meteorological Department, the nation’s official forecaster, is likely to provide its monsoon prediction later this month.