NEW DELHI, India (Reuters) — India’s finance minister attempted to calm inflation fears last week after a private weather forecasting company said there was a 60 percent chance the country would face a drought this year.
Skymet revised its prediction July 4 to a 60 percent chance of drought from its previous forecast of 25 percent in April. Drought was defined as being more than 10 percent below the long term average.
June’s rainfall was 43 percent below average, making it the worst first month since 2009, when the season turned out to be the driest since 1972.
India’s monsoon rainfall was 53 percent below average for the week ended July 2. However, the monsoon showed a revival over the weekend and was expected to push into northern India this week.
July, the second month of the monsoon season, usually gets the maximum rainfall, accounting for about a third of the seasonal downpour. Summer sowing activities pick up during the month as the monsoon rains cover the entire country.
“The revival phase is expected to continue next week,” said a weather official July 3.
India’s government this week said that sowing of summer crops had reached 45.07 million acres as of July 5, less than half of the area that had been sown at the same point last year.
Pulses had been sown on 1.85 million acres, down almost 60 percent from the same point last year.
The weak start to this year’s monsoon pushed the new Indian government to take rapid steps, including raids against hoarders to ease market concerns over possible supply shortages.
Soaring prices of basic goods such as milk and potatoes lifted retail food inflation in May to 9.4 percent, and there have been fears of worse to come with the delayed spread of the monsoon to the grain bowl region of northwestern India.
“Right now it is not a panic situation,” Indian finance minister Arun Jaitley said during a meeting with state governments to discuss ways to keep food prices down.
“Signs are that some people will try to take advantage of this situation. So the benchmark of good governance is to anticipate the problem,” Jaitley said, indicating that hoarding by speculators was a problem.