Kharif output may see limited impact from monsoon deficit as sowing improves: ICICI Bank

New Delhi [India], August 26 (ANI): India's current monsoon rainfall deficit may have a more limited impact on kharif output than feared earlier as the sowing season is largely behind, although strengthening El Nino conditions continue to pose a risk to rainfall, according to an ICICI Bank report.
"With sowing season mostly behind, current rainfall deficit may not have as large an impact on kharif output as envisaged earlier because of pick-up in rainfall in July," the report said.
Cumulative rainfall up to August 24 stood at 564 mm, 13 per cent below the long-period average (LPA), while rainfall during August 1-24 was 15 per cent below LPA. The deficit remains uneven across regions, with East India recording a 27 per cent shortfall and South India 22 per cent, compared with 11 per cent in Northwest India and 2 per cent in Central India.
The report said 67 per cent of cultivated areas or states have received normal rainfall. However, Bihar, Andhra Pradesh, Punjab, Karnataka and Rajasthan have recorded deficient rainfall.
Kharif sowing stood at 105.7 million hectares as of August 17, 1.5 per cent lower than 107.3 million hectares a year earlier. Rice acreage, the largest kharif crop, was down 3.2 per cent year-on-year at 40.5 million hectares, while coarse cereals and oilseeds also recorded lower sowing.
At the same time, sowing of pulses increased 1.3 per cent to 11.4 million hectares, while jute and mesta acreage rose 1.8 per cent. The report said sowing activity has improved, with the deficit in rice acreage narrowing.
Another key support is improving reservoir storage. Live storage across 150 reservoirs stood at 117.3 billion cubic metres as of August 20, equivalent to 64.3 per cent of capacity. While this was below last year's level, the report said improving storage could provide "some cushion against below normal rainfall", with relatively higher levels in Western, Central and Eastern India.
However, the outlook remains vulnerable to weather risks. El Nino conditions have strengthened, with the Nino 3.4 index rising to 2.37, which the report said continues to pose an "elevated risk to monsoon rainfall".
The report also noted that cereal prices should remain relatively stable given surplus government stocks, although higher sugar and onion prices have altered the recent food-price outlook. (ANI)