India Strategy l India Research

Monsoon update and forecast

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Monsoon to pick up in September except central India

26 August 2010

We reiterate that Monsoon 2010 is going to be deficient (90-95% of long term average) based on Skymet’s estimates. The monsoon so far until 18 August 2010 was 95% of the long term average (LTA). The rainfall in the month of August has been slightly below normal for Southern Peninsula and Central India. We expect the monsoon to pick from here on; especially in the North-West and it has been raining in West UP and Uttarakhand that may bring down deficit in the largest state of the country. The rainfall in the month of September 2010 is going to be in the range of 95-99% of the LTA across India. The drought kind of situation in Bihar, Jharkhand, West Bengal, Orissa and Chhattisgarh may continue. Gujarat, Maharashtra, Rajasthan and Himachal Pradesh may get normal to excess rainfall and that is already reflected in better reservoir levels in these states. Reservoir levels in most of the country are still below 10 year average except Gujarat and Maharashtra. States in the NorthWest have slightly below normal reservoir level while Bihar, Orissa, Jharkhand and West Bengal have 22%-80% below 10 year average. This could affect Rabi crop in eastern part of the country. The deficient rainfall in Eastern India has affected acreage of paddy by 1.1mn ha and that could affect the production of Kharif rice. Soybean growth has been good due to better rainfall and favourable temperature in Madhya Pradesh and Vidarbha. The vegetable and fruit prices may start softening here onwards in most part of the country and that should help to maintain food inflation in the range of 9-12%.

Analyst: Prasad Dahapute Tel: +91 22 4220 8931 E-mail: p.dahapute@pugsec.com Avishek Agarwal Tel: +91 22 4220 8953 E-mail: a.agarwal@pugsec.com Deepan Kapadia Tel: +91 22 4220 8914 E-mail: d.kapadia@pugsec.com

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Our forecast of deficient rainfall in Central India had been precise for the states of Orissa. where it was normal. Jharkhand.Monsoon till date Overall the monsoon until 18 August 2010 is near normal but has been pretty close to our forecast of 94%. We have been right so far for most of the 36 sub-divisions and expect near normal monsoon in the last week of August. Bihar and parts of West Bengal. We were completely wrong in forecasting rainfall in Western UP as it received deficient rainfall against our forecast of normal rainfall. 26 August 2010 2 . which falls in deficient rainfall category. Source: Indian Meteorological Department Monsoon Update. As forecasted earlier. all these regions are facing acute water shortage and some of the state governments may announce drought. Marathwada and Telangana. We have been wrong in forecasting scanty rainfall in Vidarbha. most parts of the North-west and Southern Peninsula has received normal to excess rainfall.

26 August 2010 3 . Rayalaseema. Tripura and Manipur may receive below normal rainfall. Coastal Andhra Pradesh. In the north-west. North India and South India. which could be recovered through excess rainfall in the month of September. Pondicherr and South Pondicherry Karnataka. with fall in prices of vegetables and sugar. Eastern 7 sub-divisions will witness excess(120+%) rainfall. It has started raining in Uttarakhand and Western UP that may continue until 2nd of September.3% in July from 14. Sikkim and Meghalaya may get heavy showers in the month of September whereas Arun Arunachal Pradesh. PUG Research Monsoon Update. Jharkhand. food-bowl of India. In Southern Peninsula. rainfall. Source: Skymet. we expect normal rainfall that will cater to better Rabi crop. Other regions in Central India like Vidarbha. UP West and UP East are in deficient zone. Parts of Central India viz. In Eastern part of the country the rainfall is going to be excess and may help in recovery of defi deficient rainfall. 29 of them may witness normal (81-119%) rainfall covering large parts of 119%) North-Eastern states. Assam. Kerala and Lakshadweep will have excess rainfall due to western disturbance in the Arabian Sea.Monsoon forecast for the month of September 2010 Monsoon 2010 may be deficient largely due to scanty rainfall in Central India. hence the drought kind of situation may continue for them. Chhattisgarh. Bihar and parts of WB may continue to have scanty hhattisgarh. The fall in inflation is due to higher base effect rather than fall in absolute prices We expect food inflation to fall further prices. Marathwada and Konkan may get slightly below normal rainfall in the month of September. the food west.6% in the prior month. Tamil Nadu. ingle September ‘10 Category wise no of sub-divisions Excess Normal Deficient Scanty Sept '10 7 29 Source: PUG Research Of the 36 metrological sub-divisions. and may remain in range of high single digit. Orissa. Rainfall in the other areas of the Southern th Peninsula including Andaman and Nicobar Islands may be slightly below normal. MP East. divisions covering Western states. Annual food inflation rate fell to 10. In the whole North West. akshadweep tern while Telangana and North Karnataka may have below normal rainfall.

Orissa and Chhattisgarh. The sowing activity of Kharif crop had been better than our forecast supported with excess rainfall in the food bowl of the country. for North Karnataka. whereas there has been shortfall of 1. The pulses and soybeans crop in Madhya Pradesh and Vidarbha wasn’t affected by delay in monsoon arrival. Madhya Maharashtra and Marathwada as these sub divisions received normal rainfall against our forecast of deficient. The main reason for the food inflation to cool off is higher base effect.1mn ha on account drought like situation in Bihar.How was our forecast for the month of July? Our forecast for overall monsoon on the country was 98% of the long term average (LTA) and actual rainfall was exactly the same. As reported earlier. Thanks to excess rainfall in Southern Peninsula and North West. Since it has started raining in most of North West with flooding in Western UP. 26 August 2010 4 . we went wrong. we expect some recovery in the rainfall across the country. Vidarbha. it may accelerate the rainfall in Sothern Peninsula and parts of Maharashtra over next 15 days. The overall crop situation for Kharif crops is mixed. the food inflation for the month of July remained high in absolute prices while it was reported by the government in low double digits. at least in first half of the month. How was our forecast for the month of August ? Our forecast for overall August rainfall in the country was near normal and so far ( until 18 August) it has been close to 90%. Himalaya Pradesh and Uttarakhand received excess rainfall that resulted in massive flooding of Punjab and Haryana. West Bengal. On the other hand. There has been steady progress in Soybean crop due to adequate rainfall and favorable temperature in MP. th Monsoon Update. On other hand we were completely wrong on Telangana. while there was normal rainfall in 20 sub divisions against our forecast of 6. 11 sub divisions received excess rainfall against our forecast of excess rainfall in 20 sub divisions. We were more precise in our forecast for North-West India where Jammu and Kashmir. So far there have been 23 sub divisions with scanty rainfall against our forecast of 1. As there is low pressure belt in Arabian Sea. West Bengal and Jharkhand. Bihar. Jharkhand. Some of the states like Bihar have already announced drought in most of the districts. Punjab. We have been right in forecasting rainfall in Central India viz. That is the reason why our forecast was so precise for the whole country. Marathwada and Tamil Nadu.

Monsoon Update.2 0. However. Himachal Pradesh. We expect good rainfall in North India and that should support the reservoir levels of the east going rivers in the country. Situation in Eastern India continued to be in bad shape with 14 out of the 15 reservoirs below their live capacities of the last 10 year average. This augurs well for Kharif crops.6 0.9 1. in Chhattisgarh by 14% and Madhya Pradesh by 8%.8 0.1 5. it is less than normal in Uttar Pradesh by 29%.4 0.5 0.7 0.3 1. overall storage is better than normal in Uttarakhand.Reservoir levels in North-west should improve by August ‘10 end In Northern India.1 0. 26 August 2010 5 .3 0.6 3. 27 reservoirs are filled above 40% of their live capacities at full reservoir level (FRL) as on 19 August 2010.3 3. West Bengal by 80% and Tripura by 22%.4 0.0 0.5 0. The higher reservoir levels in North-west and Southern Peninsula has been good for Rabi crop.0 0. The situation in West India is the most comfortable compared to rest of the country.7 0.9 0. Hence we expect the rainfall in North-West may support the reservoir levels in the downstream dams in East India which may help in resolving drinking water problem in Bihar and West Bengal. In Southern India.2 6. Karnataka and Tamil Nadu.4 2.3 0.2 0. it may improve going forward with excess rainfall. Storage status of important reservoirs in India (as on 19 August 2010) Live capacity at FRL bcm NORTHERN Himachal Pradesh Punjab Rajasthan Gobind Sagar (Bhakra) Pong Dam Thein Mahi Bajaj Sagar Jhakam Rana Pratap Sagar EASTERN Jharkhand Tenughat Maithon Panchet Hill Konar Tilaiya Orissa Hirakud Balimela Salanadi Rengali Machkund(Jalput) Upper Kolab Upper Indravati West Bengal Tripura Mayurakshi Kangsabati Gumti 0.9 0.5 85 64 73 22 10 37 43 27 25 27 27 42 68 55 52 56 57 59 Current live shortage bcm Storage as % of live capacity Current year Last year 10 years avg.2 0. Overall storage is less than normal in Jharkhand by 36%. Hydro power generation in Orissa may get affected if reservoir level situation remains grim.1 0. overall storage is better than Normal in Punjab and Himachal Pradesh.2 2. thanks to excess rainfall in J&K. it is highly deficient in the state of Rajasthan.5 0.1 0. Since the storage is better than normal in Andhra Pradesh and slightly below for other states.9 0.7 0.1 38 40 15 37 15 34 33 12 7 41 41 41 16 6 48 33 38 82 19 15 18 15 17 29 47 22 56 21 24 37 38 69 80 64 52 50 26 49 55 56 44 64 49 46 62 6.1 0. However.0 1. Maharashtra as well as Gujarat have better than normal reservoir level and that should be helpful to sugarcane production for the current year in Maharashtra.9 1.2 0.4 0.4 0.4 5.1 1. Orissa by 41%.8 0. In Central India.

5 0.9 3.3 6.2 0.1 0.2 3.5 1.3 1.4 0.4 0.6 0.4 1.2 1.6 1.0 1.Live capacity at FRL bcm CENTRAL Uttar Pradesh Uttrakhand Madhya Pradesh Matatila Rihand Ramganga Tehri Gandhi Sagar Tawa Bargi Bansagar Indira Sagar Chattisgarh SOUTHERN Andhra Pradesh Srisailam Nagarjuna Sagar Sriramsagar Somasila Lower Manair Karnataka Krishnaraja Sagra Tungabhadra Ghataprabha Bhadra Linganamakki Narayanpur Malaprabha(Renuka) Kabini Hemavathy Harangi Supa Vanivilas Sagar Almatti Gerusoppa Kerala Kallada(Parappar) Idamalayar Idukki Kakki Periyar Tamil Nadu Lower Bhawani Mettur(Stanley) Vaigai Parambikulam Aliyar Sholayar 8.0 0.1 0. 56 33 35 49 25 72 59 15 28 61 74 61 41 32 11 33 72 81 83 76 70 86 60 83 79 97 53 19 85 85 59 63 50 59 53 63 55 34 68 60 83 0.3 2. 26 August 2010 6 .5 0.8 2.8 1.3 3.1 0.2 2.2 5.6 2.6 2.7 6.2 2.2 0.2 9.9 1.2 1.0 0.0 0.2 0.2 0.9 0.8 2.0 0.4 0.4 0.1 0.2 0.7 0.4 1.1 Minimata Bangoi Mahanadi 0.8 Current live shortage bcm Storage as % of live capacity Current year 91 17 40 75 5 94 54 22 28 47 86 76 46 51 36 39 54 88 89 67 54 86 55 89 67 100 42 11 93 79 74 50 50 59 39 53 52 24 61 88 66 Last year 29 20 13 52 11 87 25 7 45 51 57 50 14 NA 8 12 70 90 93 95 79 95 68 66 94 98 50 3 92 75 48 58 44 73 39 57 66 31 75 97 91 Last 10 years avg.8 1.4 0.7 1.7 5.6 0.9 1.1 0.1 0.1 Monsoon Update.2 0.7 0.7 0.8 1.5 0.3 0.1 2.9 1.1 0.2 1.8 4.3 1.6 6.6 1.7 3.0 0.1 2.9 0.8 3.3 0.3 0.2 4.3 0.9 0.7 0.

0 0.8 Current live shortage bcm Storage as % of live capacity Current year 65 29 43 63 76 54 14 22 24 89 66 94 52 54 18 57 72 56 38 24 89 49.2 0.0 Source: Central Water Commission.1 0.1 0.0 0.7 1.2 2.0 0.8 0.2 0.3 0.6 0.3 0.3 0.7 151.3 1.4 0.2 2.5 2.3 0. PUG Research Monsoon Update.4 1.5 0.2 0.0 Last 10 years avg.3 0.7 1.5 2.2 0.5 0.1 0.6 0. 57 38 48 57 53 46 20 51 46 90 49 51 66 29 43 63 84 47 32 46 90 51.6 0.4 74.5 0.7 2. 26 August 2010 7 .2 0.0 4.4 0.Live capacity at FRL bcm WESTERN Gujarat Ukai Sabarmati(Dharoi) Kadana Shetrunji Bhadar Damanaganga Dantiwada Panam Maharashtra Jayakwadi(Paithon) Koyana Bhima(Ujjani) Isapur Mula Yeldari Girna Khadakvasla Upper Vaitarna Upper Tapi Pench (Totaladoh) Girna Khadakvasla TOTAL INDIA 6.4 0.0 Last year 31 25 45 54 26 37 3 30 15 89 32 NA 41 NA 17 36 62 50 55 15 89 39.1 2.1 0.1 0.9 0.5 1.

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