Monsoon slips into negative zone in Aug

New Delhi: After the month began with a 5 per cent surplus aided by a wet July, monsoon slipped into the negative zone in August with an overall deficit of 8 per cent, Motilal Oswal Financial Services said in a report.

The monsoon in August so far has been 30 per cent below the long period average with South India having been particularly dry.

While the northwest has received 7 per cent above normal rainfall, Central India (6 per cent below normal), South Peninsula (16 per cent below normal) and eastern and northeastern regions have witnessed deficient rainfall.

El Nino has strengthened from a ‘weak’ to a ‘moderate’ state and the latest update from the US weather agencies has been that -- it can develop into a ‘strong’ event later this year with 66 per cent probability, the report said.

Kharif sowing as of August 25 was at 0.3 per cent higher than last year.

The area under paddy cultivation is now 4.4 per cent higher than last year. However, the area under pulses is still 8.3 per cent lower than last year. Production of jute, cotton and oilseeds is also lower. Coarse cereals (1.1 per cent YoY) and sugarcane (0.8 per cent YoY) continue to do well.

Above normal rainfall in Telangana has led to an improvement in rice sowing. However, deficient rainfall in major rice producing states (with 56 per cent share in overall rice production) such as West Bengal (12 per cent below normal), Uttar Pradesh (14 per cent below normal), Andhra Pradesh (14 per cent below normal), Chattisgarh (16 per cent below normal), Bihar (24 per cent below normal), Odisha (10 per cent below normal), Tamil Nadu (10 per cent below normal) and Assam (15 per cent below normal) is a cause of concern.

Deficient monsoon in states (with 64 per cent share), such as Madhya Pradesh (11 per cent below normal), Maharashtra (8 per cent below normal), Uttar Pradesh (14 per cent below normal), Karnataka (20 per cent below normal), Andhra Pradesh (14 per cent below normal) is affecting sowing of pulses adversely.

Lower irrigation cover in all the major states would affect pulses production more.

Inflation in pulses has nearly doubled in the past five months, the report said.

Deficient rainfall, and consequently lower rice and pulses sowing, has pushed prices higher.

Rice constitutes around 4.4 per cent and pulses has a weight of 6 per cent in the overall CPI basket.