July rains ease concerns, but agriculture risks persist: CRISIL

New Delhi [India], July 10 (ANI): Early July rains have eased immediate concerns over this year's southwest monsoon after a parched June, but risks to agriculture and the rural economy remain as uneven rainfall, delayed sowing and lingering El Nino conditions continue to cloud the outlook, according to a Crisil Quickonomics report released on Friday.
The report said the recent spell of heavy rainfall has brought relief after June's sharp rainfall deficit, but cautioned that the improvement should not be seen as an all-clear for the kharif season.
"Despite this copious downpour, the outlook remains far from clear," the report said. It added that the India Meteorological Department (IMD) has forecast July rainfall at 6 per cent below the long-period average, implying that "the latter half of July could turn considerably drier."
The report said the concern extends beyond how quickly the monsoon has progressed to whether rainfall is adequate and well distributed across key agricultural regions.
Although the southwest monsoon covered the entire country in 35 days, broadly in line with its long-term average, Crisil said monsoon progress alone is not a reliable indicator of how the season will eventually turn out. "The greater concern lies in the quantum and distribution of rainfall," the report said, adding that "the swings between scarcity and surplus can be as disruptive to agriculture as a weak monsoon itself, influencing sowing decisions, crop health and ultimately rural incomes."
The report said the uneven rainfall pattern has already affected kharif sowing. As of July 5, overall sowing was down about 21 per cent year-on-year, led by declines in oilseeds, cotton, pulses, coarse cereals and other cereals.
Despite the delayed start, rainfall has improved considerably over the past few weeks. "Following a parched June, the monsoon advanced rapidly, reducing the all-India rainfall deficit from 40 per cent to 15 per cent as of July 8," the report said. However, it noted that June's rainfall shortfall was comparable to that of 2014, another strong El Nino year when deficient rainfall persisted through the season and affected agricultural output.
Using its Deficient Rainfall Impact Parameter (DRIP), which assesses crop and state-level vulnerability by combining rainfall deficiency with irrigation coverage, Crisil said agricultural stress remains elevated in several parts of the country.
"Current DRIP scores point to significant stress in Karnataka, Bihar, Uttar Pradesh, Andhra Pradesh and Telangana, with milder stress evident in Haryana," the report said.
The report added that pressure is highest on tur and coarse cereals, while well-irrigated sugarcane and relatively resilient soybean and groundnut remain less affected.
Looking ahead, Crisil said the monsoon remains delicately poised because El Nino conditions can bring both rainfall deficits and episodes of excessive precipitation.
"For now, copious showers have offered relief, but whether they herald a sustained blessing or merely a brief respite remains a question that only the coming weeks can answer," the report said. (ANI)