Water reservoir levels at lowest in four years: Motilal Oswal Financial Services

NEW DELHI: Cumulative rainfall until June 24 has been 30 per cent below normal compared with 4 per cent below normal last year, Motilal Oswal Financial Services said in a report.

As of June 22, water reservoir levels stood at 26 per cent of its live storage capacity, the lowest in four years mainly led by lower storage in the southern region of the country, the report said.

Deficient rainfall as well as lower sowing and reservoir levels does not bode well for the farm sector and inflation.

Southwest monsoon has advanced over Delhi, Mumbai and other places across the country on June 25 and it is likely to pick up pace in July and August.

Delay in monsoon can be attributed to cyclone Biparjoy, which has adversely affected the progress of rains.

Apart from the northwest (27 per cent above normal) monsoon, all other regions have witnessed below normal rainfall.

Southern peninsula (51 per cent below normal) and central India (51 per cent below normal) have seen the maximum deviation from normal followed by eastern and northeastern regions (19 per cent below normal) of the country, the report said.

IMD expects the upcoming monsoon to be normal (96 per cent of LPA with an error margin of +/-4 per cent ) in its second long-range forecast for the four-month period from June to September. However, IMD forecasted average June rainfall to be below normal (92 per cent of the LPA). Therefore, monsoon is likely to pick up in the coming months.

Month-wise rainfall received over CY02-21 showed that on an average June received only 19 per cent of the season’s rainfall, July received almost one-third, followed by August at 29 per cent .

As of June 23, Kharif sowing was 4.5 per cent less than last year mainly led by rice (-36 per cent YoY), cotton (-14.2 per cent YoY), Jute and Mesta (-12.2 per cent YoY) as well as oilseeds (-3.3 per cent YoY, the report said.

Deficient monsoon in major rice producing states (with 61 per cent share) such as West Bengal (28 per cent below normal), Uttar Pradesh (52 per cent below normal), Andhra Pradesh (38 per cent below normal), Odisha (54 per cent below normal), Telangana (64 per cent below normal), Chattisgarh (70 per cent below normal), Haryana (31 per cent below normal) and Madhya Pradesh (53 per cent below normal) has hurt rice sowing, the report said.

States with higher irrigation cover such as Uttar Pradesh, Andhra Pradesh, Telangana and Haryana will be less impacted though.

Deficient rainfall and consequently lower rice sowing will push rice prices higher. Rising global rice prices would further push local prices up. Rice constitutes around 4.4% of the overall CPI basket, the report said. (IANS)

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