India declares drought as El Nino appears

Published: August 6, 2012

  • India sees its first drought in last three years due to deficient Monsoon rains
  • As per India Meteorological Department (IMD) the El Nino weather pattern may reduce rains again in the second half of the June to September season.
  • India last suffered a drought in 2009, which forced it to import sugar that pushed global prices higher.
  • This time global grain prices are towering as the United States is also going the worst drought in the country in a half a century.
  • Monsoon rains are considered deficient if they fall below 90% of a 50-year average.
  • The monsoon is crucial for around  55 % of farmlands that do not have irrigation.

Impact on Gold and Silver:

  • India is one of the top consumers of precious metals. The deficient monsoon this year can impact rural incomes and may slash the demd for gold and silver.

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