Sector Trends     22-Jun-12
Economy
Southwest Monsoon 2012: IMD cuts rainfall estimates to be normal at 96% of LPA
IMD continue to expect normal southwest monsoon rainfall, but scales down rainfall forecast from earlier estimates of 99% of Long period average (LPA) to 96% of LPA
India Meteorological Department (IMD) has issued its second long range forecast for nation-wide (country as a whole) southwest monsoon season (June-September) rainfall. As per the first forecast issued in April 2012, the rainfall was projected to be 99% of the Long period Average (LPA) with a model error of ± 5%. This year, setting in of southwest monsoon over Andaman Sea was delayed by about 3 days. It set in over Kerala on 5th June as against the IMD forecast date of 1st June ± 4 days. The cumulated seasonal rainfall over the country as a whole during the period 1-21st June is 76% of LPA.

With low rainfall in June 2012 so far, IMD in its second rainfall forecast has expected the rainfall to be 96% of the long period average with a model error of ±4%. Rainfall over the country as a whole for the month of July 2012 is likely to be 98% of its LPA and that for the month of August is likely to be 96% of LPA both with a model error of ± 9 %.

Over the four broad geographical regions of the country, rainfall for the 2012 Southwest Monsoon Season is likely to be 93% of its LPA over North-West India, 96% of its LPA over Central India, 95% of its LPA over South Peninsula, and 99% of its LPA over North-East India all with a model error of ± 8 %.

Importance of Southwest monsoon

Rainfall is an important factor determining the performance of agriculture in India. With merely 44.6% (in 2007-08) of the total cropped area under assured irrigation, Indian agriculture is predominantly rain-fed. Consequently, years of deficient and iniquitously distributed rainfall have invariably been associated with decline in crop/agricultural production.

The pattern of rainfall in India can be classified into two seasons, viz., South-West or the summer Monsoon covering the period June-September and North-East or the winter Monsoon from October to December. The summer Monsoon accounts for about 70-80% of the annual rainfall in the country.

The quantum, spatial and temporal distribution of rainfall during South-West Monsoon has a significant impact on the prospects of Kharif crops that are essentially sown in July-August. With the exception of 2009, precipitations during South-West Monsoon have remained close to normal during the four years from 2005 to 2010. Precipitations during the last two years have been above LPA. This has contributed positively to the overall production of kharif crops. Resurgence and resilience of the agricultural sector in recent years may be attributed to satisfactory levels of precipitation accompanied by its normal progress and sowing.

Southwest monsoon 2012 progress

The southwest monsoon rainfall has been deficient with rainfall being only 78% of the LPA during 01 June to 22 June 2012, against 111 of LPA during same period last season. Among the four meteorological regions, the rainfall was most deficient at only 33% of LPA for northwest India, followed by 67 of LPA for south peninsula. The rainfall was also deficient at 81% of LPA for central India, while rainfall for east and north east India stood at 88% of LPA during 01 June to 22 June.

Among the 36 meteorological sub-divisions, the rainfall was excess for only 2 sub-divisions accounting for 1% area of country. It was normal for 11 sub-divisions accounting for 27% of the area of country. However, the rainfall for 13 sub-divisions was deficient with the 44% area of the country. Further, the rainfall was scanty for 10 sub-divisions accounting for 28% area of the country.

Rainfall Positions of Sub-Divisions
For the period from 1st June to
20-Jun 18-Jun 17-Jun 23-Jun 22-Jun 20-Jun
2007 2008 2009 2010 2011 2012
Excess 8 21 4 9 17 3
Normal 23 11 4 11 9 9
Deficient 3 4 12 11 9 16
Scanty 2 0 15 5 1 8
No rain 0 0 1 0 0 0
TOTAL 36 36 36 36 36 36

Reservoir storage declining

Water stock in 84 major reservoirs monitored by Central Water Commission dipped sharply to 25.52 bcm as on 21 June 2012 compared to storage of 30.48 at end May 2012. The live water storage is 67% of the last year's storage and 113% of the average of last ten years, while it is only 17% of the storage capacity at full reservoir level.

There were 45 reservoirs having storage more than 80% of normal storage, 19 reservoirs having storage between 50% and 80% of normal storage, while 20 reservoirs reported storage of 0-50% of normal storage. About 7 reservoirs have reported storage of 0%. Out of 37 reservoirs with significant hydropower generation, the storage build up was less than normal in 21 reservoirs.

Kharif crop sowing lags behind

As per the weather watch report from Ministry of Agriculture, the rice crop has been sown in 18.7 lakh hectare (lh) as on 22 June. It is reported that planting has been slightly delayed but nursery preparation under irrigated conditions is in progress. Sugarcane has been planted in 51.52 lh, cotton in 21 lh, coarse cereals in 5.59 lh and oilseeds in 3.13 lh as on 22 June 2012.

Sugarcane has been planted in 1.38 lh more than that in 2011-12. On the other hand, less sowing has been reported in the case of other crops as compared to this time last year.

MSPs for kharif crops 2012 raised sharply

Government has raised the Minimum Support Prices (MSPs) for Kharif Crops of 2012-13 Season in the range of 15% to 53%. The MSP of Paddy (Common) has been fixed at Rs 1250 per quintal and of Paddy (Grade A) at Rs 1280 per quintal, which represents an increase of Rs 170 per quintal over the last year`s MSPs. In addition, an incentive bonus of Rs 100 per quintal shall also be given.

The MSPs of Jowar (Hybrid) and Ragi have been raised to Rs 1500 per quintal providing an increase of Rs 520 and Rs 450 per quintal respectively. The MSPs of Bajra and Maize each have been raised by Rs 195 per quintal and fixed at Rs 1175 per quintal each. The MSP of Jowar (Maldandi) has also been raised by Rs 520 per quintal over the last year`s MSP and fixed at Rs 1520 per quintal.

The MSP of Urad has been raised from Rs 3300 per quintal to Rs 4300 per quintal.

The MSPs of Groundnut-in-shell, Sunflowerseed, Sesamum and Nigerseed have been increased by Rs 1000, Rs 900, Rs 800 and Rs 600 per quintal over the last year's MSPs and have been fixed at Rs 3700, Rs 3700, Rs 4200 and Rs 3500 per quintal, respectively. The MSPs of Soyabean (Black) and Soyabean (Yellow) have been increased by Rs 550 per quintal each over the last year's MSPs and fixed at Rs 2200, Rs 2240 per quintal respectively.

MSP of Cotton (Medium Staple) has been raised from Rs 2800 to Rs 3600 per quintal and Cotton (Long Staple) has been raised from Rs 3300 to Rs 3900.

Outlook

Rainfall is lower on y-o-y basis, and so too are the water reservoir levels. Farmers hope that South West Monsoon 2012 is normal, with proper spatial and temporal distribution. This can improve the farm income, and support consumption lead growth in India, at a time when investments remain sluggish. It will also help contain food inflation, and make our growth inclusive as high inflation affects the vulnerable section of the population more than the rest.

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