Weak monsoon raises concerns over kharif sowing, reservoir levels and food prices: Emkay
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A weak start to the southwest monsoon is posing risks to India's economy by slowing Kharif sowing, reducing reservoir levels and increasing concerns over food inflation, according to a report by brokerage Emkay.
The report said cumulative rainfall as of July 3 was 31% below the long-period average (LPA), while weekly rainfall as of July 1 was 29% below normal. June ended with rainfall 40% below the LPA, making it the weakest June in the past decade.
The rainfall deficit has affected all regions of the country, with East and North-East India recording the highest shortfall at 41%, followed by Central India at 30%. North and West India, and the Southern Peninsula, recorded deficits of 21% each.
According to Emkay, the India Meteorological Department expects July rainfall to remain below normal at less than 94% of the LPA. As July accounts for the bulk of Kharif sowing, prolonged rainfall deficiency could affect agricultural output.
Total Kharif sowing stood at 18 million hectares as of June 26, down 23% from a year earlier. Rice sowing declined 25% to 2.6 million hectares, pulses fell 30% to 1.5 million hectares, coarse cereals dropped 12% to 3.2 million hectares, oilseeds plunged 53% to 1.7 million hectares, and cotton acreage declined 35% to 3 million hectares.
The report noted that only 17% of the normal Kharif area had been sown by late June, compared with 22% during the same period last year.
Reservoir storage also remained low. As of July 2, reservoirs were filled to 26% of total capacity, 39% lower than the corresponding period last year.
Emkay warned that continued rainfall deficits in major agricultural states could tighten food supplies and push up prices in the coming months if monsoon conditions do not improve.