The prospects of a disruption in India’s monsoon season worsened after the Australian Meteorological Bureau warned on Tuesday that it was very likely that the El Nino weather phenomenon would be seen this year.

If this happens, it could push back the economic recovery and stoke inflation in India.

The Australian Meteorological Bureau said that there was a more than 70% chance of the El Nino developing this year. El Nino, a weather phenomenon that occurs when the Pacific Ocean heats up abnormally is usually associated with deficient rainfall in India where farming is heavily dependent on June-September monsoon.

The risk posed by El Nino was also flagged by Reserve Bank of India (RBI) governor Raghuram Rajan in the monetary policy review last week. “There are risks to the central forecast of 8% CPI (consumer price index) inflation by January 2015 stemming from less-than-normal monsoon due to possible El Nino effects,” he said.

After peaking in November, retail inflation based on the consumer price index has eased for three consecutive months. Retail inflation in February was 8.1%, very close to the RBI’s January 2015 target.

Agriculture related commodities have almost a 50% weightage in retail inflation, and an increase in their prices, could see inflation exceeding 8%.

The Australian forecast comes in the backdrop of a similar warning by the India Meteorological Department (IMD). In a so-called experimental forecast—termed thus because the accuracy of the predictions at this point of time cannot be vouched for—the IMD predicted that between May and July, rainfall would be normal or deficient in most parts of South Asia with the exception of North India.

Now a similar warning has been issued by the Australian Met.

The update added that although the so-called El Nino southern oscillation (Enso) is currently neutral, surface and subsurface ocean temperatures have warmed considerably in recent weeks. The bureau said that climate models around the world are suggesting that the warming of central Pacific Ocean will continue in the coming months, and sea surface temperatures will reach El Nino levels during the summer. “The waters across the central to eastern Pacific have steadily warmed since February, with the current warming pattern consistent with an emerging El Nino,” said the weekly update.

Economists are apprehensive about the effects of a poor monsoon.

Samiran Chakraborty, head of India research at Standard Chartered Bank said a bad monsoon could reverse the trend of declining food prices. He caveated that it would take a few months to understand the impact of El Nino on India, as an assessment will have to be done on the ultimate impact on food production, food prices and prices of other commodities linked to agriculture.

Crisil Research said in a note dated 4 March that it could revise its growth projections for 2014-15 downwards to 5.2% from 6%, if the monsoon were to get adversely affected due to the El Nino. It also said that retail inflation could rise above the 8% forecast in the current fiscal. “In its fight against weak growth and high inflation, the last thing that India’s economy needs is monsoon failure, which could drive up food inflation as well as weaken GDP growth,” it said.

Meanwhile, the US National Oceanic and Atmospheric Adminstration’s (NOAA) Climate Prediction Center, in its latest update on Monday, said that there is about a 50% chance of El Nino developing during the summer or fall. However, an intense El Nino has not necessarily been accompanied by a drought of equal intensity.

For instance, 1997-98 saw the century’s strongest El Nino, but it did not cause a drought in India. However 2002, which saw a moderate El Nino, saw one of the worst Indian droughts in the past century.

It has also been observed that even though six leading droughts since 1871 occurred during EL Nino events, the presence of an El Nino event does not necessarily mean that a drought will happen.

Over the years, scientists have observed that there is a correlation between warming in the central Pacific and a drought in India, but not between warming in the eastern Pacific and poor rains in India. “We have to work on the various inputs coming in from different centres and the IMD will take into consideration all these models before giving its official monsoon forecast,” said Ajit Tyagi, former Director General at IMD. “But the relationship of the El Nino and rainfall in India is not straightforward and depends on various other factors such as the Indian Ocean Dipole.”

A positive Indian Ocean Dipole (IOD), essentially an El Nino kind of phenomenon that sees a difference in temperature between the western and eastern Indian oceans, could be good for the Indian monsoon. The Australian Bureau has said that the IOD conditions are neutral as of now.

According to Tyagi, the intensity of El Nino depends on the temperatures of the Pacific and how early it sets in. “The biggest challenge is that even though various models can predict the occurrence of El Nino in coming months, it is hard to predict how it will affect the rainfall in India,” Tyagi said.

In the past 10 years that have seen an El Nino event, the Kharif (or monsoon crop) output was recorded to be much lower than usual. The two drought years including 2002 and 2009 saw a drop in monsoon rainfall of more than 15% and corresponding decline in Kharif output of more than 10%.

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