Wednesday, June 24, 2009

The Debts of the Lenders: Indian Monsoon Season Seen as Below Normal

Good news for sugar bulls - but not by much. The sub-continent is facing as much as a 2 week lull in wet weather. There is more spillover effect in the planting season for other crops such as soybeans (which is negligible compared to S. American production), cotton, and rice - although the Indian ministry denies that it will have much effect.

India 2009 Monsoon Rains Seen Below Normal-Govt

India’s monsoon rains this year will be below normal, around 93% of the longterm average, which is lower than the previous forecast, Science and Technology Minister Prithviraj Chavan said Wednesday.

He added that the monsoon rains in July will be 93% of the long-term average for the month, while rains in August are estimated to be just above the average. The four-month monsoon, crucial for crops such as rice, wheat, sugarcane, oilseeds and cotton, was 53% lower between June 1 and 23 compared with the average for the same period a year ago. About 60% of the crops in India are rain-fed.

The predictions for long-term average rainfall have an error margin of 4%, Chavan said.

The long-term average rainfall, referred to by the federal government, is 89 centimeters
over the country as a whole for 1941-1990.

“There is a high probability of El Nino conditions to prevail during monsoon,” Chavan told reporters. The probability of El Nino has been estimated at 60%. El Nino, which is said to have impacted on the progress and distribution of rainfall in India, is the abnormal warming of the surface ocean water in tropical Pacific.

“This month El Nino conditions became evident, which were not visible in April and May,” Chavan said. In April, the India Meteorological Department, or IMD, had forecast near-normal rainfall of 96% of the long-term average. Based on historical data, the IMD has ruled out the possibility of excess rainfall during the monsoon.

There are some signals of revival of the monsoon due to a likely development of a monsoon surge over the Bay of Bengal during the last week of June, the department said. It said the active phase of the monsoon is likely to continue during the first half of July, leading to the advance of the monsoon over many parts of northwest India.

Source: CME News for Tomorrow
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