Thursday, June 5, 2014

Slow moving monsoon Could Hamper BJP’s Economic Recovery Plans

(Rajan Alexander in http://exitopinionpollsindia.blogspot.in) Read our Monsoon Forecast: Monsoon 2014: Good news is that a ‘Super’ El Niño is unlikely. Bad news is that rainfall deficiency can cross a whopping 16%!




(Debiprasad Nayak inWallStreetJournal) It’s about to start raining in India, a lot, as the monsoon is set to hit the Kerala coast in next two days.

But don’t break out the umbrellas and turn down the thermostats in Delhi just yet. This year’s monsoon is expected to creep across the country more slowly than usual.

That’s bad news for Indian farmers and global markets. A delayed onset of the monsoon in the farming belt of northern India will delay planting, which could cause prices to shoot up for products like rice, cotton and sugar. India ranks among the largest producers for these commodities.

Indian farmers rely on rain to grow their crops, and the monsoon season accounts for about 70% of total rainfall.

A weak monsoon could push up food prices and with it inflation, testing the new government’s ability to promote economic growth.

If the harvest is bad, the effect on the economy will be wide-ranging. The country’s jobs market could be hurt, since over half of the country’s workforce is employed in agriculture. Fewer jobs mean fewer rupees to spend on things other than food. Manufacturers of everything from soap to SUVs are increasingly reliant on rising rural demand for their goods. A slow monsoon could also pinch the sales of these companies.

This year, the summer monsoon is already behind its schedule, as weak winds left the monsoon stranded in the Andaman Sea, said L.S Rathore, director general of the India Meteorological Department.

The department is also predicting less rainfall this year, in part due to El Niño, a weather pattern that reduces the amount of rain n India.

Mr. Rathore said El Niño will start reducing the monsoon rains by the end of July or early August, but he expects the impact to be moderate.

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