Delayed Monsoon Threatens Agriculture Sector!

Delayed Monsoon

Amidst the relentless heatwaves, the agricultural sector is bracing for significant consequences. Explore how prolonged scorching heat can impact India’s agriculture sector.

The monsoon season has arrived in India this year approximately one week later than usual. However, despite the arrival of monsoon, many states are still experiencing heat wave conditions. Additionally, the cyclonic storm Biparjoy is causing significant challenges for Gujarat and Rajasthan. These weather changes can directly affect farmers and the agriculture sector.

We know that monsoon plays a crucial role in the Indian economy and profoundly impacts the Indian agricultural sector. The livelihoods of Indian farmers are intricately tied to the timely arrival and departure of the monsoon in India.

What’s Happening?

Deutsche Bank, a brokerage firm based in Germany, reported that rainfall in India has been 53% less than normal so far. The delayed arrival of monsoon has had a detrimental impact on agricultural production. 

Farmers are facing economic losses due to water scarcity and unfavourable weather conditions. Moreover, the occurrence of floods and heavy rains has led to the outbreak of diseases in crops, posing further risks to agricultural output.

The agriculture sector holds a crucial position as the backbone of the Indian economy. According to the India Brand Equity Foundation (IBEF), approximately 55% of India’s population depends on this sector for livelihoods. India boasts the largest cultivable land for wheat, rice, and cotton, ranking as the leading global producer of milk, pulses, and spices. Additionally, it is the second-largest producer of fruits, vegetables, tea, fish, cotton, sugarcane, wheat, rice, cotton, and sugar.

States such as West Bengal, Uttar Pradesh, Punjab, Gujarat, Haryana, Madhya Pradesh, Maharashtra, and others significantly contribute to India’s overall agricultural production.

However, this year, the erratic weather patterns have become a cause for concern among farmers. The states of North and Central India are grappling with intense heat, while Gujarat and Rajasthan have been severely affected by storms, causing extensive damage to the farming communities.

What’s in it for Investors?

From an investor’s perspective, the delayed monsoon can adversely affect agricultural production, resulting in instability in the formation of supply and demand for products. This, in turn, can impact prices from a demand-supply standpoint in the commodities segment. 

What’s Next?

According to the first advance estimates for FY23 (Kharif season) by Inc42, India is projected to achieve a total food grain production of approximately 149.92 million tonnes. This significant output is influenced by the rapid expansion of the country’s population, which serves as a crucial driving force for the agricultural industry.

Regarding the monsoon, the India Meteorological Department (IMD) had initially predicted that India would experience normal rainfall during the southwest monsoon season, despite El Nino-associated conditions. However, it was also anticipated that Northwest India might receive normal to below-normal rainfall, while moderate rains were expected in the East, Northeast, Central, and South regions. As with any weather predictions, only time will reveal the accuracy of these forecasts.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

*The article is for information purposes only. This is not an investment advice.


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