When gloomy skies mean good times ahead…

monsoon,

At a time when the second wave of COVID19 is spreading across the country, deflating sentiments, the good news is that both the Indian Met Department (IMD) and private weather forecaster – Skymet, have predicted that India is likely to have a normal monsoon again this year!

In 2020, India received “Above Normal” rainfall, at 109% of the Long Period Average (LPA); this was the third highest rains after 112% of the LPA in 1994 and 110% of the LPA in 2019.

The South West monsoon is crucial for India. It delivers 70% of India’s rainfall and most Agricultural activities depend upon it. Further, the Agriculture sector accounts for about 18% of India’s GDP and employs more than half of the country’s 1.39 billion population.

Last year, Agriculture was the only sector that supported the Indian economy while it recorded a slump in manufacturing and other sectors, which were badly hit due to a nationwide lockdown.

Similarly, we expect that this year, normal rains will help support an economic recovery, which is facing new risks from a resurgence in coronavirus cases, during the second wave of the pandemic.

According to the IMD’s first long-range forecast for 2021, on 16 April 2021, the Southwest monsoon seasonal (June to September) rainfall over the country as a whole is most likely to be normal (96 to 104% of the LPA). The forecast probability, as reported by IMD, indicates

  • 25% chances of below-normal (90-96% of LPA),
  • 40% chances of normal (96-104%) ,
  • 16% chances of above-normal rainfall (104-110%),
  • 5 % chances of excess rainfall (Above 110%) and
  • 14% chances of Deficient (104-110%).

However, IMD will release its second long range region-wise forecast for seasonal monsoon by the end of May 2021.

At the same time, private weather forecaster, Skymet, has forecast a healthy, normal 2021 southwest monsoon of 103% (with an error margin of +/- 5%) of LPA of 880.6 mm, for the June-September period. The forecast probability, as reported by Skymet, indicates

  • 15% chances of below-normal
  • 60% chances of normal (96-104%),
  • 15% chances of above-normal rainfall and
  • 10% chances of excess rainfall

What’s behind this positive prediction?

This year, two oceanic parameters – El Niño–Southern Oscillation (ENSO) and Indian Ocean Dipole (IOD) – seem all set to favourably influence the Indian monsoon 2021.

The El Niño–Southern Oscillation (ENSO)

The ENSO cycle is simply a scientific term that describes the fluctuations in temperature between the ocean and atmosphere, in the east-central Equatorial Pacific.  Why is it relevant? Because global weather and climate are impacted by these deviations. When this temperature is relatively warm, it is called El Niño and when it is relatively cool, it is referred to as La Niña. El Niño and La Niña episodes typically last for 9 to 12 months but some prolonged events may last for years.

In the recent past, India experienced deficient rainfall during El Niño years 2002 and 2009, but then again, the monsoon was normal during El Niño years of 1994 and 1997.

Where the La Niñais concerned, India experienced very good rains during La Niña years of 1990, 1995, 1998, 2007, 2011 and 2020. The only time there was a strong La Niña year that coincided with a weak Indian monsoon was in 1999.

Source: Bom, Ventura Securities Ltd

The Indian Ocean Dipole (IOD)

The Indian Ocean Dipole (IOD) event is a climate event occurring over the equatorial Indian Ocean. A positive (negative) dipole event is associated with warming (cooling) over the west Indian Ocean and cooling (warming) over the east Indian Ocean.

If the sea surface temperature of the western end rises above normal and becomes warmer than the eastern end, it leads to a positive IOD. This condition is favourable for the Indian monsoon as it causes a kind of barrier in the eastern Indian Ocean and all the southwesterly winds blow towards the Indian sub-continent.

The IOD affects the climate of Southeast Asia, Australia and other countries that surround the Indian Ocean Basin and the Indian monsoon is invariably influenced by the IOD.

Source: Bom, Ventura Securities Ltd

This year, according to the Australian Met (BOM) and several agencies, such as IMD and Skymet, Neutral ENSO conditions are prevailing over the Pacific Ocean and Neutral Indian Ocean Dipole (IOD) conditions are prevailing over the Indian Ocean during this South west monsoon season. So, that’s going to deliver a favourable/normal Indian monsoon for 2021.

Madden Julian Oscillation (MJO)

There is, however, one concern, in the form of the lesser-known and highly unpredictable Madden Julian Oscillation (MJO), which can have a dramatic impact on the tropics during the monsoon season.

While the ENSO and IOD are stationary, the MJO is a transient disturbance of cloud, rainfall, wind and pressure, traversing nearly along the equator in the tropics. An average cycle of the MJO could last from 30-60 days, while the El Nino and IOD may last for several seasons. However, the MJO could visit a single region multiple times over during a single season. But during its passage, the rainfall activity is triggered and overcomes a weak monsoon epoch if prevailing in the Indian seas.

Source: Bom, Ventura Securities Ltd

View from afar

All these three oceanic phenomena hold the key to the monsoon’s performance. Yes, the monsoon has its own dynamics and this ‘trio’ broadly dictates how the 4-month long monsoon season from June to September will pan out. As things stand, we can certainly look forward to overcast skies and another reason to stay indoors.

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Disclaimer: We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to blog article hereby solemnly declare & disclose that:

We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in securities of the company. We do not have any directorships or other material relationships with the company. We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.

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