The impact of El Nino is proportional to its severity. This time, we anticipate a weak El Nino as opposed to a strong El Nino, a similar scenario in 2014 and 2018. In both years, India’s staple grain production was unaffected. We do not believe we should be unduly concerned about crop production at this time, says Sunil Damania, Chief Investment Officer, MarketsMojo.

While IMD has forecast a normal monsoon, Skymet estimates a below average monsoon owing to the El Nino. What is your assessment of the crop outlook?
We must keep in mind that this is a preliminary estimate and that these projections are subject to change. IMD will release its subsequent forecast at the conclusion of May. That would shed additional light on the likelihood of El Nino. El Nino must be considered alongside the IOD (Indian Ocean Dipole). If IOD is positive, El Nino’s effects can be mitigated. According to Skymet, IOD is currently neutral and may become moderately positive as the monsoon season begins.

The impact of El Nino is proportional to its severity. This time, we anticipate a weak El Nino as opposed to a strong El Nino, a similar scenario in 2014 and 2018. In both years, India’s staple grain production was unaffected. We do not believe we should be unduly concerned about crop production at this time.

What will be the impact and which crops are expected to be impacted the most?
During Kharif season, rice, cotton, maize, tur, soybeans, and groundnut are the most important agricultural products. However, the crops that are impacted by a lack of rainfall depends on which areas are affected. We believe that rainfall would be uneven. Consequently, only a few areas would experience below-average rainfall, which could affect some crops but not all.

IMD DG Mrutyunjay Mohapatra said that El Nino may not have a major impact all the time. Should this be calming the farmers and people in general?

We concur with the assertion. Today’s government is proactive with regard to resolving situations. We observed this during the Covid era. Therefore, even if India receives below-average rainfall, we have sufficient food grain reserves to mitigate the effect.
Fear around El Nino impact is gripping in many parts of the world? Are we staring at yet another food inflation as a result of this?
According to the most recent FAO data, global food inflation has slowed and returned to levels observed in July 2021. Prices for grain items such as wheat, maize, and rice have decreased. However, if rainfall in many parts of the world is below average, El Nino could reverse the trend, driving up food inflation. Food inflation is now trending low, so there is no reason to be concerned.

We saw unseasonal bouts of rain in many parts of the country. What has been the extent of damage to the crops?
Unseasonable rains caused crop damage, the extent of which cannot yet be quantified. Government agencies believe there will be no effect on edible grain production, but there may be an impact on crop quality. By the end of April, we will have more information on the subject. However, we should anticipate some damage (both in terms of output and quality) due to the unseasonal rainfall.

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