BOMBAY, India, June 13, Reuter: Rain, and the prospect of plenty more in the 1988 monsoon, is cheering Indian farmers and businessmen after two band years and one of the worst droughts in the history.

Experts at the Indian meteorological department at Poona said the Monsoon was running strongly and that rain should cover the entire country by its end in October.

“Parameters determining a forecast are overwhelmingly favorable for a good monsoon”, meteorologist V. Taprial told Reuters in a telephone interview.

The rosy forecasts and the good progress of the monsoon, which arrived in the Southern state of Kerala a week ahead of normal, has brightened prospects for higher agricultural and industrial production and helped, lift share prices.

“Coming after two years of drought, there could not be a more propitious monsoon than this year’s,” said K.V.R. Subrahmanjam, President of the Bombay Chambers of Commerce and Industry.

He said a monsoon that fulfilled predictions would help revive industries dependent on agriculture, such as fertilizer and agro-chemical production which are at present laden with heavy stock inventories and unused capacity.

A good monsoon would revive the rural economy and provide demand for textiles and consumer electronic goods, Subrahmaniam added.

The monsoon is also expected to improve electricity supplies to industry. The 1987 drought cut India’s power — mostly from hydro-electric generation — and supplies in most states are down between 10 and 30 per cent.

Subrahmaniam said the monsoon’s impact should lift industrial production growth to over 10 per cent in the 1988-89 financial year compared with nine per cent in 1986-87.

Trade and industry officials say that a good monsoon would mean grain production meeting the government target of 166 million tons in 1988-89, compared with provisional figures of 130-134 million tons for the current financial year.

The rain forecasts have already caused a fall in prices of edible oil. Groundnut oil prices have fallen by 1,000 rupees (77 dollars) to 21,000 rupees (1,600 dollars) a ton.

Commodity traders expect food grain and oilseed planting will be on time this year.

In Gujarat, center of groundnut production, the state government has supplied farmers with quality seeds and fertilizers.

“With good monsoon progress, the outlook for Gujarat is bright this year,” said the secretary if the Indian Oil produces and Exports Association, G. Chandrasekhar.

He said the area under groundnut cultivation in Gujarat was expected to rise by at least 20 per cent over the present 1.3 million hectres.

Cheerful monsoon forecasts have also helped share prices maintain an upward swing triggered by fiscal incentives announced by the government in the last two months.

“All the fiscal reliefs granted so far will prove ineffective if the monsoon fails. Now that the monsoon is progressing well, we can expect a market boom in due course”, stockbroker E.D. Soda water wala said.

Article extracted from this publication >> June 17, 1988