We are coming to the end of May and everybody has already started expecting the rain. Kotak Securities organised a meeting with Skymet - A Weather Forecasting company and has brought their view / prediction on this years monsoon.Kotak Securities is one of the largest share broking firm in India offering various share market investment services. Visit http://www.kotaksecurities.com for more details.
Skymet’s Monsoon Forecast: 2014
Skymet’s Monsoon Forecast: 2014
How monsoons are forecasted
• Jatin Singh, Founder and CEO of Skymet, an agri-risk-management and
weather-forecasting company was invited to share insights on El Nino and
its impact on economy.
• At the IMD meeting it was highlighted how uncertain and evolving a science,
weather forecasting is and the six-factor ‘linear’ model of the IMD.
• Skymet pointed out the advances made in forecasting weather phenomena,
which allows simulating large sets of ocean and atmospheric data in coupled
forecasting systems (CFS).
• IMD’s variables have low predictability of the output variable; Skymet relies
on El Nino as a key input and CFS to model.
Meeting with Skymet
• Skymet ‘foreshadows’ monsoon this year will see a precipitation of 94%
of the long-period average (+/-4%)
• Temporally, the deficit should be reasonably well-distributed across the four
months with August being the closest to normal
• The impact of ‘below-normal’ or ‘drought’ will be felt mostly along the
north-west and centre-west part of the country (a straight line from Punjab
to Goa and areas around that). The weather forecasting system in India
is fraught with poor modeling, poor communication and poor policy
response, upgrading India’s institutional capacities in this field is critical as
it wrestles with climate change.
Skymet forecasts a ‘below-normal’
• Skymet has forecasted a probability of 40% ‘below-normal’, 34% ‘normal’,
25% ‘drought’ and 1% ‘above-normal’ monsoon.
• Mr. Singh pointed out that the probability of a ‘normal’ or ‘below-normal’
monsoon is almost 3 in 4 and that of drought is currently only 1 in 4.
• Alternatively, the way to look at this is that the second-highest probability is
that of a ‘normal’ monsoon and ‘drought’ as an outcome is third in its
• We note that a ‘normal’ monsoon is 96%-104% of long-period average
(LPA) precipitation, ‘drought’ is precipitation below 90% LPA.
Temporal distribution indicates no
lumpiness of rain deficiency
• Any discussion of averages brings with its dispersion and unlike the IMD,
which will issue its spatial-temporal distribution later, Skymet has already
released its estimates.
• According to Skymet, the deficit in rainfall will be spread across all four
• We note that July and August get ~60% of the volume of rains and June and
September get ~20% each and hence given the higher precipitation in July
and August, India should see a ‘below-normal’ to ‘normal’ monsoon this
Spatial distribution indicates concern in
the line across Punjab to Goa
• The overall 6% deficit in the monsoon (which is what 94% LPA corresponds
to) will be concentrated in the north-west and west-central India.
• Skymet expects a staggered onset of rains in June; below-normal rains in
central and west-central India in July; a good month in August across
India except some below normal rains in peninsular India; and finally a
deficit in Andhra Pradesh, north-west and central India in September.
• If we see a staggered onset of monsoon, there is a significant
probability of slow or multiple sowing in various parts of India thereby
impacting farm economics adversely.
• A deficiency in rains impacts outputs of food grains, horticulture and
dairy leading to an impact on the output and prices of these products.
• Poor rains increase the dependency on ground water, which can push up
power and diesel demand that could lead to a secondary push to inflation.
Some implications: slow/multiple sowing,
potential inflation risk and agri-GDP slowdown
• A key takeaway was, India’s institutional capabilities failing in putting to
good use the data and tools available for forecasting, linking up the
forecasting with communication to farmers and finally the policy response
taken with poor inputs.
• India needs to focus on strengthening its institutions.
India’s institutional capabilities
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