India forecasts a seven percent deficit in this year’s monsoon rains, but a Canadian analyst thinks it could be lower than that.
“In talking to some of our Indian contacts, it is definitely a delayed monsoon and the start of it is not as vigorous as it usually is, so they are definitely concerned,” said Darren Lemieux, head trader and market analyst with Simpson Seeds.
The deficit would have to be 10 to 15 percent for his contacts to be so rattled, he said.
The India Meteorological Department issued a forecast June 10 saying rainfall would be 93 percent of the long-term average with a margin of error of four percent.
Read Also
Canada-U.S. trade relationship called complex
Trade issues existed long before U.S. president Donald Trump and his on-again, off-again tariffs came along, said panelists at a policy summit last month.
But as of June 16, the department was reporting that monsoon rains were 49 percent below normal for the month to date.
The last time India had a seven percent deficit in monsoon rainfall was 2012-13. Pulse production fared well that year, up seven percent from the previous year.
In 2009-10, the country experienced a 22 percent shortfall in rain. Once again pulse production was surprisingly good, up slightly from the previous year.
Lemieux said the impact of a shortfall is usually more pronounced in the upcoming rabi crop than it is in the kharif crop, which is currently being planted. The rabi crop relies on moisture reserves, and if they are depleted it will reduce yields of important rabi crops such as chickpeas and lentils.
Lentil prices have already been red hot because of a disappointing 2013-14 Indian lentil harvest, where there was some quality damage due to late season rains. There has been strong demand for all types of lentils in India, where consumption continues to outpace demand year after year.
Growers can thank El Nino if that trend continues. It is responsible for the disappointing monsoon forecast and poor pulse production prospects in Australia, which is a major exporter of crops such as chickpeas and lentils.
The Australian Bureau of Agricultural and Resource Economics and Sciences is forecasting 1.84 million tonnes of pulse production, down 16 percent from last year and 15 percent from the previous year.
The forecast includes a 17 percent reduction in lentil production and a 20 percent decline in chickpeas compared to 2013-14.
Lemieux said the lentil estimate might rise if farmers make a late-season switch to the crop like they did in Canada.
However, poor crop growing forecasts in India and Australia should contribute to an already robust Canadian lentil export program.
“I don’t see a slowdown in demand, and lentils are still one of the most reasonably priced pulses out there,” said Lemieux.
