India has been blessed with a 7 year streak of unusually good weather. Only last year did weather volatility cause a minor schism, but still good weather, that caused crops to come up a bit short. India pulled back from the following export markets but not entirely over the last year: sugar, cotton, rice, wheat and have become an importer of milk for the first time in history.
….And crops were overall decent.
Our unique statistical approach to forecasting future climate trends using short, intermediate and long term weather cycles and correlations, we call our climate cycle algorithm, allowed us to make a forecast 9 month ago for a failed monsoon season in 2023. That forecast is starting to verify as the month of June is looking to be the driest and hottest seen in decades.
The month of July is the wettest and most important month of the growing season for India and if July misses there is no way to recover crop potential. Our work strongly believes that July will come up well short and be the worst July monsoon season since the failed July of 2002. A combination of a developing El Nino (dry teleconnection for India), neutral India Ocean Dipole (dry teleconnection for India) and an active Indian Ocean typhoon season has helped starve the monsoon of its needed upper level moisture content.
If India was forced to pullback from exporting key Ag supplies last year on only minor production issues what will happen this year if we see systemic major crop problems? For example, it is not uncommon for sugar production be to be down over 20% year over year.
While everyone keeps looking over to China for supply/demand side signals for most ag market prices, instead the market should be looking over to India as the surprise catalyst for 2023. With India experiencing strong economic growth with some of the best demographics in the world and arguably the most populace country in the world…India might be the new demand source to drive Ag prices higher as China did back in the 2000's.
What happens in India will not stay in India as it relates to Ag market price discovery. Got India?
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If one wants more details can download a sample report using the link below:
https://www.hackettadvisors.com/Register_SampleReport.asp
You can also reach us by emailing at shawn@hackettadvisors.com. Anyone involved in the Ag space whether as a farmer, investor, banker etc. needs to consider how to manage this risk to an historic possible drought scenario in India to maintain business stability.
We are so grateful and thankful for your support.
To all those involved in the Ag trade/business, we want to thank you for doing so much to feed the world. Without your efforts, the world would suffer greatly.
Remain optimistic, never give up, always look to help those in need, and live your life to maximize your talents.
Enjoy your life...It is the only life you got.
May your Ag hedging/trading decisions be Smart Ones. We pray for everyone's health safety and happiness. Blessing to all.
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