Food prices may remain low if IMD's prediction holds true

The Hindu

25-04-2025

This year, India might receive an 'above normal' monsoon for the second year in a row, according to the first monsoon forecast for 2025 by the India Meteorological Department (IMD). The country is likely to receive about 105% of the long period average (LPA) rainfall this year with an error margin of ± 5%.
The LPA for southwest monsoon rainfall in the 1971-2020 period was 87 cm. If the rainfall received is less than 90% of the LPA, it is 'deficient'. If it is between 90% and 95% of LPA, it is 'below normal'. And if it is within the 96-104% range, it is 'normal'. An LPA range between 105% and 110%, as is the forecast for 2025, is 'above normal'. Rainfall is in 'excess' if it is above 110% of the LPA.
This is just the first forecast; an update will be issued in June. Past data shows that the IMD's first monsoon forecasts have mostly been off the mark. The difference between the first forecast and the actual rainfall received has been within the ± 5% range only eight times in more than two decades. However, adopting a new strategy for monsoon forecasting in 2021 seems to have improved the accuracy of IMD forecasts.
Chart 1 shows the difference in first rainfall forecast by IMD and the actual rainfall received in the respective years (in % points)
Dr. Madhavan Nair Rajeevan, Vice Chancellor, Atria University, and former Secretary, Ministry of Earth Sciences, believes that the IMD's forecasts have improved substantially and that errors have significantly reduced. 'Seasonal forecasting is a challenging task due to its inherent limits in predictability. It is the most challenging problem in climate forecasting,' he says.
He explains that since 2007, the IMD has been using an advanced statistical model with much more accuracy. And since 2021, it has been using a 'multi model ensemble dynamical system' for generating seasonal forecasts, in addition to statistical models which couple the climate forecasting models of various global climate agencies along with the IMD's own models.
If the actual rainfall received adheres to the forecast, this year will be the second year in a row when India will receive an 'above normal' rainfall. While monsoon rainfall in 2024 was 108% of the LPA, it was 'below normal' in 2023.
These are just the average figures for the country as a whole, and there are usually significant geographical variations. For instance, in 2023, though the country received 'below normal' rainfall, Telangana, Tamil Nadu, and Puducherry received 'excess' rainfall. In the same year, east Uttar Pradesh, Jharkhand, and Bihar received rainfall much below India's average. Rajeevan says that while the IMD is trying to predict such spatial variability, there is still a lot of scope for improvement.
Chart 2 shows the spatial distrubution of rainfall across regions during the southwest monsoon season (as a % deviation from normal). Data for 2023-24
The Indian monsoon is highly susceptible to the vagaries of climate change and global warming — particularly the El Nino and La Nina effect. The El Nino is a sporadic weather event that causes warm surface water temperatures in the Pacific Ocean. La Nina causes cold ocean temperatures in the central and eastern equatorial Pacific Ocean. These have been linked to changing rainfall patterns and crop failure in India.
However, the IMD forecast for this year predicts neutral El Nino-Southern Oscillation (ENSO) conditions during the monsoon. This in effect means that neither El Nino nor La Nina is expected to interfere with the monsoon this year. These weather events are also a function of their interaction with the Indian Ocean Dipole (IOD), a climate pattern in the Indian Ocean. A positive IOD may help rainfall despite the El Nino, and worsen its impact if it is negative.
A good monsoon also implies good farm output, easing any concerns of a rise in food prices. Rising food and vegetable inflation have been worrisome trends in the last two years and have been driven in a large part by erratic rainfall. Inflation data since January 2025, however, shows an easing of food prices mainly because of a good harvest last year, says Nambi Appadurai, Director, Climate Resilience Practice, WRI India.
Food inflation started easing in January 2025 when it dropped below 6% from over 8% in December 2024. This slide continued in the following months and food inflation dipped below headline inflation in March 2025 for the first time since July 2023.
Chart 3 shows headline and food inflation (Y-o-Y change, in %)
Appadurai points out that 'a variety of external factors' and not just a good monsoon impact food prices. The Economic Survey last year noted that apart from unpredictable rainfall patterns, weather conditions such as heatwaves, other logistical issues, trade controls, and plant diseases also had a major effect on food prices in the past two years. An HSBC research report asserts that rising temperatures have overtaken rainfall as the main reason in pushing up food prices.
'Last year the monsoon was 'above normal' because of which the agricultural output grew by 3.6% and foodgrain production by 5.7%,' he adds. India is expected to produce about 166 million tonnes of foodgrains in 2024-25 according to the second advanced estimates. Meanwhile, production estimates for cereals (159 million tonnes) and rice (121 million tonnes) for 2024-25 indicate the highest rate of production growth in about a decade.
While the 'above normal' monsoon prediction for India this year is good news, a better spatial distribution of rainfall is more important for crop production. For instance, while 'excess' rainfall in the regions of Maharashtra in 2024 led to destruction of onion crop, 'deficient' rainfall in some areas of the Gangetic plains and Punjab led to a delay in paddy sowing, driving up the cost of food.
Source: Centre for Monitoring Indian Economy (CMIE) and the Ministry of Statistics and Programme Implementation (MoSPI)
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