• Announcements
  • Economy
  • Investment
  • IPOs
  • Weekly Markets
  • Products
  • Morninger
  • Eveninger
  • Industry
  • refer
  • 7824-003-757
  • Download App Get App
  • Contact
Flattrade Kosh Flattrade Kosh
Open Account
Flattrade Kosh Flattrade Kosh
Open Account
Flattrade Kosh Flattrade Kosh
Open Account
Flattrade Kosh
Open Account
Flattrade Kosh > Economy > El Nino’s impact on Indian monsoon, agriculture sector and GDP
EconomyIndustry

El Nino’s impact on Indian monsoon, agriculture sector and GDP

Posted by Flattrade May 10, 2023
Share on
READ NEXT
Steel demand to rise 7-9% in FY24 on government’s infra push: Report

El Nino is likely to play an important role with respect to Indian monsoon season in FY24 and Indian agriculture sector, according to CareEdge Ratings. Indian agriculture sector, which employs 60% of the population and contributes 18% to India’s gross value addition, heavily depends on the summer monsoon season (June – September) as the rainfall during the season serves as a crucial water source for various agricultural activities. About 50% of the country’s net sown area depends on the monsoon rains, which also restores water reservoirs.

The summer monsoon season accounts for 80% of the total annual rainfall and also coincides with the main crop-growing season, Kharif. During this summer monsoon season, major crops such as rice, pulses, oil seeds, cotton, and sugarcane are produced. States with limited access to irrigation depend heavily on a normal monsoon.

El Nino’s influence on Indian monsoon

Indian monsoon has been affected by El Nino in the past, but there has been instances where India has received normal monsoon despite El Nino. The concept of a normal monsoon is based on the rainfall volume’s departure from the long-period average (LPA). Generally, the monsoon is termed normal if it is within +/-4% of the LPA. In the last four years, India has witnessed a normal monsoon.

However, a US-based agency, National Oceanic and Atmospheric Administration (NOAA) has indicated the possibility of El Nino’s arrival by mid of this year. In India, the occurrence of El Nino is likely to result in poor monsoon implying below normal or deficient rainfall during the June-September period. El Nino refers to the unusual warming of the surface ocean waters in the equatorial Pacific region which affects the global climate. If the El Nino arrives after September, then it would not be a major concern for India’s monsoon. Meanwhile, India’s official weather forecast agency – India Meteorological Department (IMD) – has predicted a normal monsoon (96% of LPA) for the country.

The rating agency said that a clearer picture regarding a normal monsoon will emerge only by the end of May. It noted that the chances of India receiving a normal or below-normal monsoon will depend on the intensity and timing of the occurrence of El Nino. The development of an El Nino during April-June is particularly risky for India’s southwest monsoon season. Additionally, the positive phase of IOD (Indian Ocean Dipole) should be significantly strong to offset the negative impact of El Nino as the latter has a stronger impact on the Indian monsoon.

El Nino impact on Indian economy

The risk of El Nino comes at a time when the country’s economy is already weighed down by higher inflation, concerns over growth slowdown and weather fluctuation including heatwaves and unseasonal rains, according to CareEdge Ratings.

The rating agency said that a below-normal monsoon can further aggravate the situation amidst elevated prices of Kharif crops such as rice and pulses. Moreover, a bad monsoon could affect the production of these agricultural commodities and put an upward pressure on food inflation. In addition, the reservoirs are likely to get depleted faster due to the poor rainfall and could affect Rabi crops such as wheat.

India’s Inflation outlook could worsen if there is an uptick in global commodity prices. A decline in domestic agricultural production is expected to put downward pressure on rural income and weigh on rural demand, CareEdge Ratings noted. Sectors such as FMCG, tractor manufactures and two-wheeler makers are likely to be affected by lower rural demand and weigh on overall GDP growth.

However, these risks due to El Nino could be offset by governtment’s prudent policy response and timely support measures, according to the rating agency, as rural economy has diversified in the last few decades. About two-third of rural income comes from non-agricultural sectors such as manufacturing, construction and services and the government’s infrastructure push and focus on the tourism sector are likely to boost non-farm employment further. This in turn would contribute positively to rural income and limit the downside risk of El Nino on rural demand and India’s GDP.

Government measures

The Indian government must ensure enough buffer stock of essential food items such as wheat, rice and pulses, according to CareEdge Ratings. As on April 1, wheat stocks stand at a six-year low of 8.35 million tonnes and only marginally above the minimum required 7.46 million tonnes for this date. Therefore, procurement of wheat must be keenly watched and in case of any shortfall, the option of import should be kept open to fill the demand-supply gap.

Rice, which is a main Kharif crop, is sensitive to the amount and spatial distribution of rainfall. Last year, the government had imposed curbs on rice exports amid concerns over production due to below-average monsoon rainfall in key growing states. If there is a shortfall in rice production this year too due to below-normal monsoon, these export bans should be extended to ensure adequate domestic supplies.

Open a Free Demat Account
Tags: Agriculture BSE COMMODITIES Demat Account Earnings Economy El Nino farmers Farming Flattrade Forex Forex trading India Irrigation Market News Market Update Markets Monsoon nifty nifty futures Nifty Today NSE Opening Bell options Pre Market Rainfall Rice sensex SENSEX Today Share Market Stock Market stocks Trading Account Wheat
Share on
Share on Facebook Share on Twitter Share on Pinterest Share on Email
Flattrade May 10, 2023
Previous Article Pre Market Report: Dalal Street likely to open higher; Apollo Tyres, Nazara Tech, Lupin in focus
Next Article Post Market Report: Dalal Street ends higher as energy and auto stocks gain; Sanofi India, BASF India, Cera in news

You Might Also Enjoy

Industry

Understanding NSE’s Guidelines for Client-Generated Algos: What Retail Investors Need to Know

May 7, 2025
Industry

Renewable Energy Sector: A surge in Investments and Growth

April 30, 2025
EconomyMarket

Impact of US Tariffs on Indian Currency and Indian Market

April 9, 2025
Eveninger

Benchmark indices ended lower; All the sectoral indices closed red; Broader indices tanked more than 2 percent

February 28, 2025

Fortune Capital Services Private Ltd. SEBI Registration No. INZ000201438. Member Code for NSE: 14572 BSE:6524 MCX: 16765 and ICEX: 2010. CDSL DP ID: 12080300 SEBI Registration No.IN-DP-CDSL-729-2014. Registered Office: Kochar Technology Park, 6th Floor, SP-31-A, 1st Cross Road, Ambattur Industrial Estate, Ambattur, Chennai – 600 058. For any complaints pertaining to stock broking please write to [email protected] and for DP related to [email protected] Please ensure to read the Risk Disclosure Document carefully as prescribed by SEBI.

“Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances”

“Prevent unauthorised transactions in your account, update your mobile numbers/email IDs with your Stockbroker/Depository Participant. Receive information of your transactions directly from Exchange/Depository on your mobile/ email at the end of the day. Issued in the interest of investors”. As a business we do not give stock tips and have not authorized anyone to trade on behalf of others. If you find anyone claiming to be part of FLATTRADE and offering such services, please email to [email protected]. “KYC is one time exercise while dealing in securities markets – once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.” Dear Investor, if you are subscribing to an IPO, there is no need to issue a cheque. Please write the Bank account number and sign the IPO application form to authorize your bank to make payment in case of allotment. In case of non-allotment, the funds will remain in your bank account.


“Attention Investors 1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. 2.Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge. 3. Pay 20% upfront margin of the transaction value to trade in cash market segment 4. Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 and other guidelines issued from time to time in this regard. 5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month. Issued in the interest of Investors”

Disclaimer: ‘Investment in securities market are subject to market risks, read all the related documents carefully before investing’.

“Investment in Mutual Fund market are subject to market risk. There is no guaranteed or assured rate of return. Past Performance is not indication of future returns. Please read all related documents carefully before investing”.

“The securities quoted are exemplary and are not recommendatory”.


“Brokerage will not exceed the SEBI prescribed limit”.

Registered Office:

Fortune Capital Services Pvt Ltd
Kochar Technology Park, 6 th Floor,
1 st Cross Road, Ambattur Industrial Estate,
Ambattur, Chennai – 600058.

Company

  • Home
  • About
  • Kosh
  • IPO
  • Services
  • Pricing
  • List of Charges
  • Contact

Useful Links

  • Brokerage Calculator
  • Downloads
  • Margin Details
  • Fund Transfer
  • Knowledge Center
  • Refer & Earn
  • Investor Charter

Quick Contact

Support Number:
044-61329696 / 044-35019696

Support Email: [email protected]

Join our Telegram Channel for trading related activities and information.