Economic consequences for South Asia: India on track for lowest monsoon rains in eight years

Less precipitation can affect crops, result in higher food prices in Pakistan too

MUMBAI/LAHORE (Reuters/Web Desk) – India is poised for its lowest monsoon rains in eight years, with the El Nino weather pattern seen crimping September precipitation after an August that is on track to be the driest in more than a century, two weather department officials told Reuters on Monday.

The monsoon, vital for India's $3 trillion economy, delivers nearly 70pc of the rain the country needs to water crops and refill reservoirs and aquifers. Nearly half of the farmland in the world's most populous nation lacks irrigation.

Read more: Extreme weather events in Pakistan: WMO says climate change effects rising in Asia

The summer rainfall deficit could make essentials such as sugar, pulses, rice and vegetables more expensive and lift overall food inflation, which jumped in July to the highest since January 2020.

Lower production could also force India, the world's second biggest producer of rice, wheat, and sugar, to impose more curbs on exports of these commodities.

"El Nino dampened rainfall in August, and it will also have a negative impact on September rainfall," said a senior official at the India Meteorological Department (IMD). They declined to be identified since they were not authorised to brief the media.

India is on course to end the June-September monsoon season with a rainfall deficit of at least 8pc, which would be the widest since 2015, when El Nino also curtailed precipitation, the official added.

The weather department did not immediately respond to requests for comment.

Indian weather authorities are expected to announce their September forecast on Aug 31.

IMPACT OF EL NINO

In its last full-season forecast, on May 26, the IMD had anticipated a rainfall deficit of 4pc for the season, assuming limited impact from the El Nino weather pattern.

El Nino is a warming of Pacific waters that is typically accompanied by drier conditions over the Indian subcontinent. India is heading for its driest August in more than a century, weather department officials said earlier this month.

Read more: Inflation and interest rates: El Nino will brew up potent new economic storm

The current monsoon has been uneven, with June rains 9pc below average but July rains rebounding to 13pc above average.

The erratic distribution of monsoon rains has led India, the world's largest rice exporter, to limit rice shipments, impose a 40pc duty on onion exports, permit duty-free imports of pulses, and could potentially result in New Delhi banning sugar exports.

The southwest monsoon will begin withdrawing from north-western India on time or slightly before the normal date of Sept 17, the other IMD official said.

The last four Septembers have seen above-average rains due to delayed withdrawal of the monsoon, he said.

"In September, northern and eastern states could experience below-normal rainfall. However, we might see a revival in rainfall in the southern peninsula," the second official said.

September rainfall is key for winter-sown crops such as wheat, rapeseed and chickpeas.

"Soil moisture level has gone down because of scanty rainfall in August. We need good rainfall in September, otherwise planting of winter crops would be affected," said a Mumbai-based dealer with a global trading house.

WHAT’S IN STORE FOR PAKISTAN

It is not a good news for Pakistan as it country witnessed well below average rainfall in August after most parts of the country received heavy rains in late June and July. However, northern Punjab, Kashmir and upper Pakhtunkhwa had experienced below average rains during these two months, reflecting a continuous shifting in the monsoon pattern since 1980s.

Read more: Pakistan fourth most vulnerable country as El Nino threatens emerging economies

Moreover, the dry conditions – drop in soil moisture – would also have negative effects on the sowing of winter crops, especially in rain-fed areas. Another factor is variation in temperature which remains a threat even during the current season.

And reduced yield will exacerbate the food inflation crisis because of further rise in food prices. One must remember that Pakistan is still paying the cost of the historic floods in 2022 which not only destroyed standing crops over a vast region but also delayed cultivation later in the year during winter.