Problems never come singly. Just as the world was reeling under the impact of a wide oscillation orchestrated by the American president Donald Trump on the tariff front, the international order changed beyond recognition thanks to an extraordinarily unilateral and largely avoidable one-sided war initiated by Uncle Sam against Tehran in West Asia. In fact, these two events have completely reset the geopolitical playing arena. The surrounding uncertainties’ galore has already pushed nation-states into a pincer-like situation. Indeed world leaders are at their wits’ end to discover a solution to quickly wriggle out of the cobweb.
When Climate and Geopolitics Collide
As they keep their fingers crossed, a new threat of a natural kind looms over. Well, scientists have warned that the El Nino conditions are developing over the Pacific Ocean. Typically, El Nino brings weak rain activity in the tropical region. It could have a twin fallout – rise in temperature and shortfall in rains. If one were to go by the meteorological department, India is headed for a below-normal monsoon season this year, with seasonal rain during June to September projected at 90 per cent of the long period average. IMD has said that the estimate carries a model error margin of plus or minus four per cent.
It points to a higher likelihood of deficient rainfall. Since 1950, India has seen 16 El Nino years. Seven of them saw below normal monsoon rainfall. This time around, El Nino appears to arrive at an uncomfortable moment where one is experiencing global warming, extreme temperature and monsoon variability. It could yet prove a gargantuan issue. There are twin aspects to tackle. For one, a strong storage level can moderate the impact of farm production. Reports suggest that the storage levels in reservoirs are strong. For another, rising temperatures arising out of the El Nino effect could trigger greater disruption to the economy as a whole.
Policy makers’ Dilemma
Now, food has become a serious inflation concern. In fact, the RBI has raised its FY27 inflation forecast to 5.1 per cent from 4.6 per cent, citing higher crude oil prices, supply-chain disruptions, monsoon uncertainty and El Nino risks. It has even warned that inflation could move closer to the upper end of its tolerance band later this year. Higher commodity prices, depreciating rupee and escalating fuel prices have all conspired to make the job of the policy planners a lot trickier.
