THE RAIN GODS

India Inc too invokes the rain god
Partha Sinha & Namrata Singh, TNN, Apr 22, 2011, 07.09am IST

MUMBAI: Amid a series of negative factors that have been affecting the business and market sentiment over the last few months, the Meteorological Department's forecast of a normal monsoon this year has come as a breath of fresh air for corporates and brokers alike.In case the country receives rainfall as per the Met's estimates, it could help the government tackle the inflationary situation more easily by limiting food price inflation, which in turn could moderate hikes in interest rates in the economy, analysts said.The government said on Tuesday that the June-September monsoon this year would be about 98% of the long-period (50-year) average, with an error range of +/-5%. The agriculture sector depends largely on good monsoons for its growth and is, therefore, specially beneficial to the rural economy. It also said that a more detailed forecast will be presented in June, including estimates of the regional distribution.While a normal monsoon is generally positive for the economy as a whole, this is especially favourable to FMCG, consumer goods, two wheelers and small car companies since they are pushing hard to enter the rural market. Leading FMCG players like Hindustan Unilever and Godrej Consumer Products (GCPL) will benefit when rural markets prosper. HUL derives around 40% of its turnover from rural markets."A normal monsoon is very good for the FMCG sector," said Adi Godrej, chairman, Godrej Group. "A good monsoon does lead to higher growth in FMCG offtake, especially in rural areas. GCPL's rural business salience is around 30%," he said.Agrees R S Sodhi, MD, Gujarat Cooperative Milk Marketing Federation (GCMMF), maker of 'Amul' brand of products. "We are forecasting an increase of 8-10% in milk production this year. A good monsoon would assist in achieving this target," Sodhi said.A normal monsoon also drives agricultural and dairy sectors, he added.A normal monsoon should also help in moderating agricultural inflation, said Indranil Sen Gupta, economist with DSP Merrill Lynch. "This should help douse agflation after two years of weather shocks," Sen Gupta said. "If rains are indeed normal, agflation—currently 10.7%—should cool off in the second half of 2011 and enable inflation to peak off as well. This, in turn, will allow the RBI to pause after 100 basis points of rate hikes till October," he added.In a report, Edelweiss Capital, however, warned that in the past "there have been instances of large deviations between projected and actual rainfall". But it added that international agencies have forecast that La Nina, a global weather condition that often plays havoc with the Indian monsoon, would also weaken in the Pacific equatorial region over June, the month when the rains first hit India.On the negative side, broking houses pointed out, the spatial distribution of rainfall is also important. In addition, brokers are also hoping that a repetition of 2009—when compared to a forecast of 96%, the actual rainfall was 77%—does not occur this year.

FORECAST

Himalayan farmers give early pointers on climate change

(AFP) – 12 hours ago

PARIS — Himalayan villagers have won the backing of climate science for their suspicions that snow cover, water resources and the ecosystem are changing in their region, a study published Wednesday said.

The authors of the research carried out by Britain's Royal Society say this is the first time that subjective perceptions about climate change have been put to a wide scientific test.

And, they argue, it shows that local knowledge, far from being snubbed or sidelined, can be a useful tool for combatting the climate threat.

Researchers interviewed 250 people living in 10 villages in Singalila National Park, in the Darjeeling Hills of India's West Bengal state, and in eight villages in Ilam district of Nepal.

They asked them about 18 possible indicators of climate change in the past decade.

These interviews were then followed up with a looser-structured questionnaire in meetings at 10 other villages in the same area, the aim being to cross-check the results.

Three-quarters of the interviewees said they believed the weather had been getting warmer over the past 10 years, while two-thirds said the onset of summer and the monsoon had advanced.

Nearly half the respondents thought there was less snow on the mountains than before and 70 percent said water was less plentiful.

Roughly half said they believed that some plant species were budding earlier than before and that mosquitoes had appeared in villages where none had been seen before. At least a third said new crop pests or new weeds had emerged in places where they farmed.

These observations tally with scientific studies on temperature, rainfall and species carried out in the Himalayas or other regions, although there is no confirmation that the onset of monsoons has advanced, said the paper.

Those who lived at high altitude (between 2,000-3,000 metres, 6,500-9,750 feet) were far likelier to say they had seen changes compared with those who lived at low altitude, considered to be below 2,000 metres (6,500 feet).

This, too, chimes with scientific predictions that mountainous and snow-covered areas are likelier to experience climate impacts before lowland areas.

The paper, published in the journal Biology Letters, marks the biggest attempt yet to dissect local knowledge on climate change and compare it with scientific evidence.

Local knowledge usually has poor standing in climate science because it is often sketchy, short-term or skewed by personal experience.

For instance, if a farmer suffers two or three bad harvests, he may wrongly blame climate change, which is a long-term phenomenon, rather than poor farming techniques or a run of bad luck with the weather, which is short term.

But the paper says that intimate knowledge of the local environment can be a useful resource for testing theories and policies on such problems as flood, drought and invasive species.

The Himalayas are exposed to climate change because changes to monsoon patterns and higher temperatures affect snow cover, which in turn affects water resources for humans.

Its 15,000 glaciers feed Asia's eight largest rivers, five of which -- the Indus, Ganges, Brahmaputra, Yangtze and Yellow rivers -- are likely to be hit by worsening water stress in coming decades, with consequences for more than 1.4 billion people.

"Despite the immense likely environmental, economic and social costs, reliable information about the extent and magnitude of climate change and its consequences in the Himalayas are not well known," said the paper.

The authors are Pashupati Chaudhary, a graduate student of biology at the University of Massachusetts at Boston (UMB) and Kamaljit Bawa, a professor of biology at the UMB and president of the Ashoka Trust for Research in Ecology and the Environment (ATREE) in Bangalore, India.

Copyright © 2011 AFP. All rights reserved

imd

IMD's normal monsoon forecast brings respite to policymakers
ET Bureau, Apr 20, 2011, 03.47am IST
Tags:

* rural economy|
* normal monsoon

NEW DELHI: The government on Tuesday forecast normal monsoon rains for the country in 2011, boosting prospects of the farm sector and giving respite to policymakers struggling to check rising inflation.

Quantitatively, the overall rainfall is likely to be 98% of the long-period average with a 5% margin of error, minister for earth sciences Pawan Kumar Bansal said.


The India Meteorological Department (IMD) will update its forecast in June along with details of the regional spread of rains.

Although, the contribution of the farm sector to the gross domestic product has fallen to 14% and diversification of the rural economy has reduced the impact of the rains to some extent, monsoon still enjoys a sentimental value. An outlook of a deficient monsoon could provoke hoarding and push food prices higher.

IMD director-general Ajit Tyagi said there was a 'very low' probability of a deficient rainfall between the crucial months of June and September.

The forecast of a normal monsoon will allay concerns over inflation, which has remained stubbornly high despite eight rate hikes by the RBI since March 2010.

Experts, however, cautioned against reading too much in the first official monsoon forecast. "The timeliness and geographical spread of the monsoons are more important for agriculture," said D K Joshi, chief economist with Crisil. "We would get to know about those only later."

India has stocks of food well in excess of the buffer norms, but poor rains could affect production of fruit, vegetables and pulses. These have been the main drivers of food inflation.

Experts said a possible weakening of La Nina conditions, or the cooler-than-average surface temperatures in the Pacific Ocean, could affect the monsoon.

"We are monitoring sea surface conditions over the Pacific and Indian Oceans carefully," Tyagi said. "So long as La Nina conditions remains neutral, there is no cause for worry."

The forecast in June will provide rainfall likelihood for July and August over the country as a whole and the seasonal rainfall over the four geographical regions of India. This will be a more crucial forecast for the farm sector as kharif sowing depends largely on the progress of the monsoon.