Rainfall trend weakens, no meaningful concern on agriculture growth yet  Macquarie Research,

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Rainfall trend weakens, no meaningful
concern on agriculture growth yet
 Rainfall trend remains weak: According to the India Meteorological
Department (IMD), on an all India area-weighted basis, weekly rainfall
remained weak at 22% below normal as of week ended August 3 compared to
23% below normal in the previous week. On a cumulative basis, rainfall was
6% below normal up to July 27.
 IMD expects below normal rainfall during Aug-Sept: According to IMD,
quantitatively, rainfall for the country as a whole during the period Aug-Sept
2011 is likely to be 90% of LPA with a model error of ±8%. For the 2011
monsoon season (June to September), IMD expects rainfall to be below
normal (90-96% of LPA).
 Water level in reservoirs is comfortable so far: According to Central Water
Commission, the total live storage in 81 key reservoirs in India stood at
74BCM, or 49% of the storage capacity at FRL (Full Reservoir Level) as of
Aug 4. This is much above last year’s storage of 35% and the last 10 years
average of 38% (see table later for details).
 Crop sowing by farmers holding up: Crop sowing for summer crop (kharif)
that accounts for nearly 50% of total agriculture production was up 0.8%YoY
as of August 5 after declining by 0.9%YoY in the previous week. Within food
grains, crop sowing was up 6.3%YoY for rice but declined by 8.4%YoY and
10%YoY for pulses and coarse cereals respectively. With close to 80% of the
crop sowing already done, we believe that it is important to monitor the
temporal and spatial distribution of rainfall over the coming weeks to ensure
limited damage to agriculture production on account of below normal rainfall.