India July rainfall ~12% below normal so far

According to the latest update on the progress of South West monsoon 2010, all India rainfall during the monsoon season so far (between 1 June and 21 July) and during July (from 1-21 July) were ~14% and ~12% deficient, respectively, compared to their long period average (LPA).

During the monsoon season so far (June 1- July 21), actual rainfall in South peninsula has been 9% above LPA. In fact, South peninsula is the only region where the actual rainfall so far has exceeded the LPA. The actual rainfall in North West India and Central India was 12% and 19% below the LPA, respectively. Progress of rainfall in North East India remained the worst with 21% below the LPA.

The IMD, in its late June forecast, had estimated monsoon to come in at 102% of LPA for the season between June and Sep 2010. The forecast also estimated a normal outlook for July and August, with July expected to receive rainfall of 98% of LPA and August 101% of LPA. However a significantly large model error of ±9% was built in both for July and August.

What emerges as a point of concern is that the monsoon last year was significantly below the LPA and a below par monsoon this season would affect agri GDP as well as food inflation. For July, the rainfall has been deficient by 12% so far. Although this is within the ±9% model error of the 98% of LPA forecasted by IMD, there exists risks of rainfall for the full month of July being well below the “base case” forecast of 98%.

On the whole, thus, the IMD’s projection of above-normal rainfall looks vulnerable. Moreover, even if the headline all-India number turns somewhat better on the back of improved rainfall in the latter part of the monsoon season or better than expected rainfall in one region, the overall spatial and temporal distribution of rainfall so far appears to be a point of concern.

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