Indian Monsoon: What is El Nino and how it will affect food prices in India

Owing to hotter temperatures and droughts, food prices are expected to rise, reveal experts. File/Pic

The onset of El Nino has triggered monsoon anxiety across the country. According to weather experts at National Oceanic and Atmospheric Administration (NOAA), the U.S., El Nino has emerged and is expected to strengthen by winter this year. Temperature anomalies in the Pacific Ocean point to a setting of El Nino, which is known to suppress monsoon rainfall.

El Nino and La Nina are climate cycles in the Pacific Ocean that affect the weather patterns worldwide. In Spanish, El Nino stands for ‘little boy', referred to as ‘Baby Jesus' while La Nina stands for ‘little girl'. During the early 1900s, fishermen from the Peruvian coast began to notice a fall in fish harvest during Christmas. Therefore, they termed the phenomenon El Nino owing to its occurrence around the birth of Jesus.

By the 1960s, scientists had established the connection between the rising ocean temperatures in the Pacific and falling fish harvest. During the El Nino cycle, warm water in the Western Pacific Ocean shifts towards the South American coast along the equator. The phenomenon sets in when sea temperatures in the tropical eastern Pacific increase by 0.5 degrees Celsius or more over the long-term average. The tropical eastern Pacific experiences stronger El Nino effects than ordinary weather.

El Nino anxiety
Episodes of El Nino and La Nina typically last nine to 12 months, but can sometimes last for years. According to NOAA, El Nino and La Nina events occur every two to seven years on average, but not regularly. The last major El Nino occurred in India in 2015. In the last seven decades, the El Nino cycle occurred 15 times, with India experiencing normal or above-normal rainfall in six instances.

If meteorologists at Indian Meteorological Department (IMD) are to be believed, then India is set to receive normal monsoon rainfall in 2023. However, the rise of El Nino is speculated by weather experts to dampen the rainfall this season. Looking back at India's past reveals how most El Nino years led to severe drought and crop destruction. In several instances, agricultural authorities were compelled to limit exports of Indian grains owing to low-scale production.

"The impact on the monsoon is not only going to be because of El Nino but largely because of the fact that we are transitioning from a La Nina winter of 2022-23 to an El Nino summer of 2023. Such a transition tends to produce the largest deficit of rainfall, around 15 per cent," reveals Raghu Murtugudde, Earth system scientist and affiliate professor at Columbia University.

Skymet Weather, on its blog, stated: "Fears of an early and strong El Nino are being expressed during the monsoon season. As per NOAA researchers, the magnitude of the predicted El Nino shows a very large spread. While finding El Nino after La Nina (the colder counterpart of El Nino) isn't rare, having extreme ones so close together is certainly abnormal. The last big one was witnessed in 2015-16."

Rajesh Kapadia, who runs the blog, Vagaries of the Weather, says that there is the possibility of a delay in the monsoon. "The wait for proper monsoon rainfall continues. Monsoon onset with some heavy showers is likely by June 25 to 27. We need to understand that El Nino is not just the only factor affecting the Indian monsoon."

It is too early or premature to predict whether the quantum of rainfall will be affected. "It is safe to assume that there is a possibility. In 1997, a very strong El Nino prevailed. However, that year, the Indian monsoon was good as there were positive parameters that facilitated normal rainfall. This is likely to happen this year, too," continues Kapadia.

Impact of El Nino on Monsoon and Agriculture

Depending on its strength, El Nino can cause a range of impacts, such as increasing the risk of heavy rainfall and droughts in certain locations around the world said Michelle L'Heureux, a climate scientist at the Climate Prediction Center, U.S. "Climate change can exacerbate or mitigate certain impacts related to El Nino. For example, El Nino could lead to new records for temperatures, particularly in areas that already experience above-average temperatures during El Nino."

This time El Nino phenomenon has set in in the South Pacific and that affects weather in and around both the Arabian Sea and the Indian Ocean. El Nino is being watched closely by investment bankers for corporate forecasts as well. The uncertainties it brings have cast a shadow over the world of business strategy and finance.

Rajeev Kashikar, a city-based investment banker shares that El Nino is likely to have an impact on agricultural production, and consequently, commodity prices as well. "Owing to hotter temperatures and droughts, food prices are expected to rise," said Kashikar. Incidentally, the prices of tomatoes have doubled and are peaking at around Rs 50-60 per kg in parts of Borivli, Parel, Nerul in Navi Mumbai and Thane. Mumbai Agricultural Produce Market Committee owes the rise to a shortage in tomato stock.

Food prices to rise?

Meteorologists have confirmed that El Nino Southern Oscillation (ENSO) and Cyclone Biparjoy have impacted monsoon onset in much of the country. "The delayed monsoon is going to impact kharif crops particularly paddy with much of eastern Indian reeling under hot wave conditions such that the nursery produce has been delayed," informed Ashok Kumar, Director - Farm Prosperity, Transform Rural India.

This will impact overall yield and have an inflationary impact in the second half of the year. One visible sign has been the recent imposition of stock limits on wheat even though the country had a bumper wheat crop. Additionally, the CPI inflation fell to a 25-month low of 4.34 per cent in May, a large measure helped by food prices, added Kumar.

Biparjoy will impact the groundnut and overall oilseed market given the widespread cyclone impact in Gujarat which produces over 40 per cent of the total groundnut production of India. The combined impact of ENSO and Biparjoy dampens hope from normal monsoon prediction by IMD. The impact will be differentially visible across India and across commodities.

The feedstock price rise will increase the price of milk and other animal protein such as eggs and poultry with a cascade on food inflation. This being an election year in major states in north India with high dependence on rainfed farming, and general elections next year. The burgeoning food subsidy bill will impact fiscal deficit and consequent inflationary impact, reveals Kumar.

One indication of the fragile state has come from the Monetary Policy Committee of RBI which kept unchanged the benchmark interest rate even though inflation was in a safe zone. Will the expected rise in food prices mean better times for farmers? Unlikely, as the productivity downside is differential region-wise and commodity-wise. Rainfed farmers are bulk. Almost 60 per cent of the 12-crore-odd Indian farmers will experience an income slide continuing the income trend reported by NSSO's Situation Assessment Survey 2019.

Another calamity linked with El Nino is the case of forest fires. Take, for instance, the Goa wildfire which spread through the month of March. The state's forest department inquiry developed a report investigating the cause behind the forest fire. The report suggests that a conducive environment and extreme weather conditions, deficient rainfall in the preceding season, unusually high temperatures, and low moisture and humidity led to the fires.

Impact on the Indian economy

Kashikar forecasts a downfall in corporate performance owing to lowered profit margins. He owes poor profits to crop damage and food inflation. Invoking the economic cycle, he shares that national tax collection will be affected as corporate profits go down. This in turn will set an increase in fiscal deficits that will lead to higher budgetary pressures. The income deficit will affect the overall demand, leading to a shrinking economy.

Kashikar adds, "Inflation is already at an excessively high rate. And conspiratorially food prices did not come down even in the face of a surfeit of crops. The main concern of economists has been the peaking food inflation over the last 3 years in spite of excessive crop production and falling commodity prices on exchange trading in commodity derivatives, futures, and options. If El Nino sets in, these inflated prices may get justified. So, ultimately we are all jacked."

In case of severe El Nino, parts of Central Asia, India, Pakistan, Indonesia, Malaysia, Thailand, various parts of Africa, and China to a certain extent will experience higher than usual temperatures. "It is still possible for el Nino to change directions and spare us. But all indications so far hint at a severe El Nino. Overall things look grim for the global and Indian economy and India if El Nino kicks in big time," shares Kashikar.

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