Could India’s 2016 monsoon disappoint again?

Western Canadian farmers are expected to plant more peas and lentils in 2016, based on intense Indian demand for those crops.

However, analysts wonder whether that demand will be sustained in 2016-17.

It all hinges on what kind of monsoon rain season India receives this year. Weather forecasters are divided.
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There is a growing consensus that the strong El Nino now influencing world weather patterns has peaked and will be replaced by neutral conditions or a weak La Nina by summer.

Conventional wisdom suggests that will lead to plentiful rain during monsoon season and increased pulse crop production for the world’s biggest pulse producer.

However, one weather observer said a warming Indian Ocean could result in the third consecutive year of below-average monsoon rainfall and another year of healthy pulse demand out of India.

This is important for Canadian growers, who have benefitted from attractive prices and are expected to plant more pulses.

Brian Clancey, editor of Stat Publishing, is forecasting 4.46 million acres of lentils, up 13 percent from last year, and 4.2 million acres of peas, a 14 percent increase.

Both crops are at the historically high end of their price range because of strong demand from India, where growers have faced two consecutive droughts.

Last year’s southwest monsoon was 13.5 percent below average and the 2014 monsoon was 12 percent below average. That has led to unusually strong demand for Canadian red lentils, yellow peas and chickpeas.

India had a poor kharif (summer) crop last year, and the rabi (winter) crop is off to a rough start because of dry conditions in the northern part of the country and a warm December.

However, analysts wonder if demand could fade in 2016-17, around the time Canadian producers are harvesting what could be a big crop.

Clancey said in Saskatchewan Pulse Growers’ most recent Pulse Market Report that a La Nina could replace the strong El Nino by summer. That normally leads to a good monsoon season in India and increased kharif and rabi season pulse plantings.

Marlene Boersch, a partner in Mercantile Consulting Venture, agreed.

“Should weather and precipitation normalize on the (Indian) subcontinent, then Canada may potentially face drastically reduced import demand over the next crop year,” she wrote in an article in the Pulse Market Report.

“This consideration is important when contemplating the wisdom of forward contracting at attractive values for the 2016 crop. Grower contracts would essentially absorb some of the weather exposure to South Asia.”

Weather forecasters have mixed opinions about what is in store for India in the coming monsoon season, which typically runs from the beginning of June to the end of August.

Jason Nicholls, senior meteorologist with AccuWeather, said a weak La Nina could be in place by the time the monsoon season arrives, which usually bodes well for India.

“I think it’s at least a normal monsoon for most areas and a lot of models are indicating, especially if La Nina kicks in, it could actually go above normal,” he said.

Nicholls said the vast majority of India’s annual rainfall occurs during that three-month-long monsoon period, and it has a dramatic influence on crop yields.

David Streit, chief operating officer of Commodity Weather Group, said strong El Ninos tend to fade quickly and are often replaced by a La Nina by early summer.

He agreed that under normal circumstances that would result in a better-than-average monsoon season.

However, there was a drier-than-normal monsoon in two of the five cases where a strong winter El Nino was rapidly replaced by a summer La Nina.

Warmer-than-normal sea surface temperatures in the Indian Ocean tend to mute the rain-boosting impact of La Nina, which is the case right now and has been for the past 18 months or so.

Streit said he has looked at a variety of models that forecast Indian Ocean temperatures by summer.

“What I found a strong bias towards was maintaining that warmer-than-normal sea surface temperature in the Indian Ocean basin,” he said.

Streit believes that will result in a third consecutive year of below average monsoon rainfall, al-though it shouldn’t be nearly as bad as last year.

“It wouldn’t surprise me if we had something that fell down in the minus five percent range,” he said.

That could result in continued strong demand for Canadian pulses, and Streit said there could be good supply to meet that demand.

The warm blob of water in the Pacific Ocean on the west coast of North America that led to dry conditions on the Prairies last year appears to be dissipating.

“That will be weakening as we come into this next season, so that should help to mitigate at least some of that dryness bias that we had there last year,” he said.

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