Monsoon deficit narrows but El Nino threat remains, reports differ

Two reports offer contrasting assessments of India's monsoon. Macquarie's report, dated 24 August, says the cumulative rainfall deficit narrowed to 12.6 per cent by 19 August from 35 per cent in June, and that Kharif sowing has recovered to just 2 per cent below last year's level. It notes adequate reservoir levels in key states have reduced risks to crop output and food inflation, though it flags Bihar and parts of southern India for monitoring.

The Economic Times, citing two unnamed senior weather department sources, reports India is heading for its weakest monsoon in nearly two decades, with rainfall likely to end 15 per cent below the long-term average, the lowest since 2009. The sources say El Nino is strengthening and is likely to suppress September rainfall, which could hurt yields of summer-sown crops and reduce soil moisture for winter crops. The IMD is expected to issue its September forecast by the end of August.