Monsoon worries washed away? Not really, it needs to pour in July too

Even as the monsoon’s progress outlived the Met forecast for June and livened up stocks, investors should note that July accounts for 33% of total rainfall in the country as compared to 15% in June. Only 6 times in the past 14 years has it been different. In 2000, 2001 and 2008 calendar years, good rainfall in June was followed by poor rain during the months of July and August. But, in 2005, 2006 and 2010, average rainfall between July and September more than made up for scanty rains in June. According to government data, total sown area stands at 91.61 lakh hectares as on June 19, 2015, compared with 98.88 lakh hectares last year.

Since water levels in the Sabarmati and the Krishna are below their long-term average, the adjoining areas where oilseeds, pulses and raw cotton are grown would require higher rainfall. In contrast, the Ganges, which waters paddy, the principal kharif crop in the East, is flowing above the average level. Thus the performance of monsoon in July would influence agri production and GDP. According to estimates, agriculture growth is expected to be 1.2% this fiscal, against 0.2% last year. Agriculture contributes 17.6% to India’s GDP and 54% of crop area are dependent on rains.