Several global models are predicting El Nio to appear around the second half of the year, which are the crucial rain-bearing months.
Weather watchers said it can't be known till May whether El Nio will impact the monsoon or not.
El Nino is often associated with below average warmer, dry weather across Asia Pacific region.
The finance ministry on Thursday raised concerns over the possible impact of El Nio conditions on India this year, saying if recent forecasts came true, the country could see lower agricultural output and higher inflation. "Some meteorological agencies predict the return of El Nio conditions in India this year. "If these predictions are accurate, then monsoon rains could be deficient, leading to lower agricultural output and higher prices," the ministry said in its monthly economic review.
Total area impacted across India pegged at 18.9 mn hectares.
Domestic-focused agricultural chemical (agrochem) companies could face near-term headwinds, given the worries on the El Nio effect on monsoons, higher inventory, and pressure on margins. Some of these were reflected in the October-December quarter (third quarter, or Q3) results of companies and may impact them in the current quarter (fourth quarter, or Q4) as well. Nuvama Research pointed out that the sector witnessed mixed performance during the quarter as global agrochem and domestic fertiliser companies maintained growth momentum, while adverse agronomical conditions and excess channel inventory weighed on domestic market volume offtake.
Steady progress in June; north and central regions to get good pre-showers
Though the summer is expected to be hotter, global and domestic forecasts point to good rains.
Moody's Investors Service on Friday raised India's growth projection for 2023 calendar year to 6.7 per cent on account of robust economic momentum. "Strong services expansion and capital expenditures propelled India's 7.8 per cent real GDP growth in the second (April-June) quarter from a year ago. "We have accordingly raised our 2023 calendar year growth forecast for India from 5.5 per cent to 6.7 per cent," Moody's said in its Global Macro Outlook. - el nino
Ahead of the seven-phase Lok Sabha elections, keeping food prices under check has emerged as one of the topmost priorities for the government. Food prices would likely have a bearing on the preferences of voters. In the past, there have been instances when governments have been voted out over rising food inflation.
A minister said the country had 7% less rain than normal.
Hailstorms may cause Rs 12k-cr crop damage, El Nino a bigger worry.
Monetary Policy- Easing expected to happen later this financial year.
"This year, the Southwest Monsoon is likely to set over Kerala on May 31 with a model error of four days," the India meteorological department said on Wednesday.
The onset of the southwest monsoon is being keenly watched this year as it may provide an early sign regarding its progress over the Indian subcontinent, particularly when El Nio is expected to rear its head during the latter half of the season.
IMD director general K J Ramesh said the Met wasn't being conservative and weather patterns indicated that there was a possibility of rainfall being very near to the 50-year LPA of 89 cm.
Climate scientists warn that climate change is intensifying heatwaves in India, with the cooling effects of La Nia potentially becoming less effective in a warmer future. The India Meteorological Department (IMD) predicts an early summer with above-normal temperatures and intense heatwave spells, following an unusually dry winter and the warmest February since 1901. Experts emphasize the role of human-caused climate change, along with natural climate drivers like El Nio and La Nia, in shaping weather patterns. While La Nia typically brings cooler temperatures, scientists suggest that under climate change, its ability to mitigate heatwaves may be diminished.
Above-normal heatwave days are predicted in most parts of central, east and northwest India during this period.
The monsoon this year in India was likely to be 'below normal' at 95% of LPA: Skymet
FMCG CEOs indicate that the market should stabilise post the general elections and that some growth should make its way back especially in rural areas
Automobile (auto) retail sales in India grew by an impressive 14 per cent in July compared to the same period last year, driven by a surge in the rural economy, good product availability, and product launches. While passenger vehicles (PVs) saw a 10 per cent increase during this period, inventory levels have surged to a historic high of 67-72 days in PVs, equating to Rs 73,000 crore worth of stock, according to the Federation of Automobile Dealers Associations (Fada). This poses a risk to dealer sustainability. Inventory levels in July 2023 were only 50-55 days, equating to a stock worth Rs 49,833 crore. In June 2024, inventory was between 62 and 67 days, with a stock value of Rs 60,000 crore.
The IMD attributed the projection to a weakening of El Nio and the Indian Ocean Dipole turning positive.
Elevated food price-led inflation could become a sore point for markets, which they seem to be ignoring at current levels, observe analysts. Retail inflation in India - as measured by the Consumer Price Index (CPI) - came in at a three-month high of 6.52 per cent in January 2023, compared with 5.72 per cent in December and 5.88 per cent in November 2022. The inflation print for February, according to Madan Sabnavis, chief economist at Bank of Baroda, will be critical for the Reserve Bank of India's monetary policy committee.
IMD will present its month-wise and region-wise forecast in June.
If El Nino condition affects the monsoons, as is being forecast by foreign agencies, it can slow down the economy to 5.2 per cent next fiscal from a projected 6 per cent.
After lagging behind other segments in the automotive (auto) space over the past few years, two-wheelers are expected to reverse their volume underperformance. After witnessing a 36.3 per cent volume decline over the 2018-19 (FY19) through 2021-22 (FY22) periods, the sector staged a recovery in 2022-23 (FY23), with volumes rising 17 per cent. While volumes are still a quarter lower than the FY19 peak of 21 million units, a double-digit growth trajectory is expected to prolong.
The services sector growth in India rose to a 13-year high in September on sharp increase in new business amid strong demand conditions, and job numbers continued to increase as overall business mood improved, a monthly survey said on Thursday. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 60.1 in August to 61 in September, signalling a sharp upturn in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
Monsoon revival over weekend likely, but second-half rainfall may be muted. If the rains become scarce after mid-August, the standing kharif crops might be impacted
Fitch Ratings on Thursday retained India's growth forecast for the current fiscal at 6.3 per cent citing economic resilience despite tighter monetary policy and exports weakness, but upped year-end inflation projection on El Nino threat. The Indian economy grew 7.8 per cent in the April-June quarter of current fiscal on strong services sector activity and robust demand. "The Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, with growth outpacing other countries in the region," Fitch said, while projecting 6.3 per cent growth for current fiscal (April-March), and 6.5 per cent for next fiscal.
Till Thursday, the country had received 41 per cent less June rainfall than normal - the scantiest in a decade and one of the rarest occasions when the shortfall in the month was more than 30 per cent - private weather forecaster Skymet said in its daily weather forecast on Friday.
"We have to stand in readiness to go beyond keeping Arjuna's eye to deploying policy instruments, if necessary" to contain inflation, said Reserve Bank Governor Shaktikanta Das on Thursday. Headline consumer price index-based inflation projection for the second quarter of 2023-24 has been revised up substantially, primarily due to the price shock from vegetables, at 6.2 per cent by the RBI form 5.2 per cent estimated in June. Unveiling the bi-monthly monetary policy, Governor Das said the moderation in headline inflation to 4.6 per cent in the first quarter of 2023-24 was in line with the projections set out in the June MPC meeting.
The economy is likely to log in a tepid 6 per cent growth next fiscal, in line with the consensus estimates, rating agency Crisil said on Thursday. The agency also sees the economy averaging a growth rate of 6.8 per cent over the next five fiscals. Crisil further said it expects the corporate revenue to log in double-digit rise again next fiscal.
Vegetable rates may ease from September, led by tomato prices, which have started showing signs of correction on the back of increased supply, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday. "Looking ahead, the spike in vegetable prices in July is starting to see a correction, led by tomato prices. "New arrivals of tomatoes in mandis are already softening the prices, coupled with proactive supply management in the case of onions.
The IMD came out with a dismaying prediction.
To ensure immediate cooling of the body, the hospital has set up a first-of-its-kind heatstroke unit.
Between June 1 and July 28, about 32 per cent of the 685 districts in the country did not receive adequate rainfall.
Automotive (auto) major Mahindra & Mahindra (M&M), which is readying to launch nine sport utility vehicles (internal combustion engine/ICE), seven Born Electric Vehicles (BEVs), and seven light commercial vehicles by 2030, has outlined an investment of Rs 27,000 crore in its auto business between 2024-25 (FY25) and 2026-27 (FY27). Over the next three years, the company will deploy Rs 37,000 crore, including its auto business, farm business (Rs 5,000 crore), and service business (Rs 5,000 crore).
States have been told to prepare in advance to counter any impact of an adverse southwest monsoon.
Though early days, meteorologists point towards a neutral La Nina during the initial phase of the four-month monsoon season this year that starts from June. If this holds true, by the time the rains hit the mainland, it could mean there would be one less reason to worry about the prospects of the monsoon this year. Weathermen said making any accurate prediction of how El Nino will behave and what impact it can have on the progress and distribution of rains is difficult to say at this point. A clear picture will emerge around late May or early June.
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