PREVIEW-India monsoon seen normal this year -weather chief

* Weakening El Nino augurs well for monsoon

* Good rains vital for oilseeds, sugar, rice

* Monsoon progress to shape govt policy on grain exports

By Ratnajyoti Dutta

NEW DELHI, April 12 (BestGrowthStock) – A second straight poor
summer monsoon is unlikely, India’s weather office chief said
ahead of an official forecast for the rains that are crucial to
the economy of the world’s second most populous nation.

In 2009, the worst monsoon rains in 37 years caused
widespread losses in key crops like oilseeds and sugarcane,
which fed through to food price inflation that reached double
digits in the past year.

The latest data showed the food price index was up 17.70
percent in the year to March 17, strengthening expectations of
a hike in interest rates when the central bank reviews policy
next month. [ID:nSGE6370AB] For a factbox, see [ID:nSGE63A01E]

But weather observations made against a historical set of
parameters modelled on a supercomputer to predict the monsoon
signal good rainfall this year, and the chief of the India
Meteorological Department, Ajit Tyagi, said the chances of a
monsoon failure two years in a row are remote.

“It happens rarely,” Tyagi told Reuters.

Data from the weather office shows that out of about 20
droughts since 1901, 17 were followed by near-normal rainfall.
The weather office will issue its formal monsoon forecast in
the second half of April.

Summer monsoon rains traverse the subcontinent from its
southern tip to the Himalayan north from June through
September.

The rains are vital for rural India, home to two-thirds of
its billion-plus people who are a key support base for Prime
Minister Manmohan Singh’s government voted back to power last
year as its policies boosted farm incomes.

India, the second largest producer and top consumer of
sugar, had to import a record five million tonnes of the
sweetner last year as cane fields were hit by the drought,
making it a key driver of New York raw sugar futures (SBc1: )
which peaked at 30.40 cents a pound on Feb. 1.

Rainfall is vital for higher cane production to boost sugar
output during processing.

Higher sugar supply could also encourage the government to
reverse a series of measures, including duty-free imports of
sugar, that were taken last year when output fell sharply.

For a timeline of government’s measures on sugar duties,
see [ID:nSGE6290DQ].

For an analysis on India’s sugar demand, see
[ID:nSGE6280G4]
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For a graphic on rainfall in years following a drought, see
http://graphics.thomsonreuters.com/10/04/IN_DRGHT0410.gif
For a graphic on India’s monsoon forecast vs actual rain see:
http://graphics.thomsonreuters.com/10/04/IN_MSNFCT0410.gif
For a Factbox on monsoon rains, see [ID:nSGE63A01E]
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OILSEEDS AND WHEAT

Lower oilseed output also last year led India to overtake
China as the world’s biggest edible oils buyer, and good
monsoon rains would reduce Indian imports, an industry official
said.

B.V. Mehta, head of the Solvent Extracters’ Association,
said adequate rainfall was important for the edible oils
industry.

“Good rainfall is very important, but it should also be
well distributed across oilseeds producing regions,” he said.

Hopes for a normal monsoon this year has also brightened
prospects for wheat exports from India, which banned shipments
three years ago amid fears of scarcity.

India faces a storage problem as the 2010 harvest is
expected to be a record, exceeding demand for the fourth
straight year.

The government has already allowed limited exports of wheat
to neighbouring countries, and last week, India’s farm minister
Sharad Pawar said the country had received trade queries for
overseas sale of wheat on bulging stocks. [ID:nGE63802B]

“The government can make bold decision on wheat exports. It
can tinker policies if the monsoon shapes up on expected line,”
said S. Raghuraman, a Delhi-based independent analyst.

Normal rainfall would also help Indian government that has
faced protests against rising prices.

EL NINO

Weather officials are particularly encouraged by the
weakening of the El Nino phenomenon, which can create havoc in
weather across the Asia-Pacific region, unleashing droughts and
heavy storms.

“There are indications of a weak and neutral El Nino.
Towards the end year, there could be La Nina (the opposite,
cooling phenomenon),” Tyagi said.

Last month, the Geneva-based World Meteorological
Organisation (WMO) said the El Nino had peaked, but was
expected to influence climate patterns up to mid-year before
dying out. [ID:nLDE62T16P]

India’s farm secretary, P.K. Basu, said it was too early to
predict the monsoon, but weather conditions such as the El Nino
augured well for the rainy season. [ID:nLDE62I1L9]

High temperatures before monsoon rains, which usually start
on June 1, also augur well for the rainy season, scientists
say.

The weather office said this year’s March temperature rose
to a record in several regions, while April has seen severe
heat wave conditions over many parts of the country.

Growth Stocks
(Editing by Himangshu Watts and Ed Lane)

PREVIEW-India monsoon seen normal this year -weather chief