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Skymet’s Monsoon Forecast: 2014


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View the presentation to know some key takeaways regarding Skymet’s forecast for monsoons in India for 2014 and its implication on the economy.

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Skymet’s Monsoon Forecast: 2014

  1. 1. Skymet’s Monsoon Forecast: 2014
  2. 2. 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.
  3. 3. Meeting with Skymet Key takeaways: • 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.
  4. 4. Skymet forecasts a ‘below-normal’ monsoon • 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 probabilistic estimate. • We note that a ‘normal’ monsoon is 96%-104% of long-period average (LPA) precipitation, ‘drought’ is precipitation below 90% LPA.
  5. 5. 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 months. • 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 year.
  6. 6. 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.
  7. 7. • 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
  8. 8. • 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 need strengthening
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