While the monsoon in India is tracking at 11% above normal, the distribution is uneven across the country and could pose a threat to this year's foodgrain production and may worsen the inflation outlook, analysts said on Tuesday
July is a key month for Kharif. The sowing of kharif crops begins with the onset of the southwest monsoon in June. The India Meteorological Department (IMD) has projected a normal southwest monsoon this year.
Data shows that rains have been geographically uneven, with concentration seen in central and southern India, trailing in the northwest and a steep 15% below-normal in the east and the northeast.
"If monsoon rains progress in August and are geographically more even, Kharif sowing could still pickup in the next month. Thus, it is still too early to raise an alarm. However, if this uneven distribution of rainfall continues, then a potential cut in foodgrain production, especially rice, would be a downside risk to agriculture GVA growth and an upside risk to food inflation," said analysts at research firm Nomura.
Source: The Economics Times