Indian farmers may not get any relief this year, according to a report by research firm Nomura. Preliminary evidence suggests that El Nino risks are rising in India and could lead to sub-par rains, hurting rural demand and food inflation in the country.
What is especially painful for farmers is that this lack of rain would come on the back of excessive rains this winter which have led to large-scale crop damage across north India.
It must be noted that India’s agricultural economy is already reeling under the pressure of consecutive bad kharif (summer) and rabi (winter) seasons.
A third consecutive bad agricultural season could severely impact rural incomes, force the government to announce higher Minimum Support Prices and possibly push food inflation temporarily higher.
– Nomura India Chief Economist
The Australian Commonwealth Bureau of Meteorology’s Southern Oscillation Index (SOI) dropped to -11.2 in March from 0.6 in February. A sustained SOI reading below -8 indicates El Nino conditions.
The bureau has raised the possibility of El Nino conditions developing this year to “at least 70 %” – up from an earlier predicted 50 % – as reported by Nomura.
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