Saturday, April 24, 2010

First Official Monsoon Prediction – Normal rains –Positive for FMCG

IMD predicts South-West monsoon in 2010 to be “normal”

The first official long range forecast predicts a “normal” South-West monsoon (June- September) for the country as a whole in 2010. Quantitatively, the rainfall is likely to be ~98% of the long period average (LPA) with a model error of ± 5%.

This is the first of the two-stage forecast strategy that IMD releases for long range forecasting of the South-West monsoon. An update to this forecast is issued in June.

International agencies echo view; El Niño likely to weaken

Other international agencies corroborate the prediction suggesting high probability of normal South West monsoon in India for 2010.

According to IMD, the El Niño condition over equatorial Pacific—one of the factors for a poor monsoon during 2009—is likely to prevail till early part of the monsoon season, but will weaken thereafter.

This is positive for most FMCG companies like HUL, ITC, Godrej Consumer, Colgate and Dabur which get 40-50% from sales from rural areas.

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