Monsoon’s uneven march could fuel food inflation: Analysts 

With the Indian Meteorological Department signalling that parts of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka and Tamil Nadu may see less than normal rainfall this month, sowing of paddy and pulses could be further affected. These effects were already exacerbating food inflation, reckoned analysts at brokerage Motilal Oswal. File
| Photo Credit: Reuters

Despite a wetter July so far lifting the overall rainfall above the long period average (LPA), India’s southern peninsula, the Deccan Plateau and the eastern region continue to face a below-normal monsoon and Kharif sowing remains lower than last year for crops like rice and pulses, spurring increases in their prices. 

By July 15, the overall sown area of Kharif crops was 2% lower compared with the same time in 2022, with maize (-5.6%), rice (-6.1%), pulses (-13.3%) and cotton (-11.6%) being some of the major crops facing shortfalls in sowing this year. The widest decline was recorded in Arhar, with the area sown more than 38% lower than last year, Bank of Baroda’s economics research department observed in a note. 

Worryingly, reservoir levels in western and southern regions of the country were also at lower marks than last year, even as there had been uneven distribution of rainfall this season, with parts of West and North India seeing excessive rainfall, while it was deficient in Bihar, Jharkhand and the North Eastern States.   

With the Indian Meteorological Department signalling that parts of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka and Tamil Nadu may see less than normal rainfall this month, sowing of paddy and pulses could be further affected. These effects were already exacerbating food inflation, reckoned analysts at brokerage Motilal Oswal. 

“Deficient rainfall, and consequently lower rice and pulses sowing, has pushed prices higher. Rice constitutes around 4.4% and pulses have a weight of 6% in the overall Consumer Price Index,” the analysts noted in a report. “July is a crucial period for sowing Kharif crops as about 32% of monsoon precipitation typically occurs during this month,” they added.