India is staring at a rise in food inflation soon, as weak monsoon rainfall hits the country’s food output, said a report. The sowing patterns of key Kharif crops have been significantly lower and these crops include rice, food grains, oilseeds and pulses, a CARE Ratings report said, adding that the weak progress can result in the retail inflation in the food components. “The retail inflation in the food components for June’19 has risen to 13-months high and weak progress going ahead could push food inflation higher,” it said. This can go higher than the already peak wholesale food inflation (yoy) for June’19 which stands at close to 7%.
In India, only the western belt of Maharashtra, island regions of Lakshadweep and Andaman & Nicobar, parts of UP and Punjab and north-eastern belt have received normal rainfall, during 1 June to 24 July 2019 period. Of the country’s 36 meteorological subdivisions, 21 (which is about 58% of all the divisions) witnessed deficient or scanty rainfall. This is highest in the last 5 years, but still better than 2014 which qualified as a near-drought situation. The upcoming RBI’s Monetary Policy Committee will factor in the panning out of monsoon and the subsequent progress of sowing in the country. RBI’s MPC is scheduled to meet on 7 Aug 2019.
However, monsoon is not the only factor affecting the sowing patterns in India. The country’s crop production can also take a considerable hit due to low reservoir level for the week ended 25 July 2019, the report said.
Which crops will suffer production slump?
The food grains are expected to see a major production slump as out of 704.5 lakh hectares land, only 303.7 lakh hectare of land has been cultivated in 2019 as against 338.2 lakh hectares. This is a negative deviation of 57% in overall numbers and a negative deviation of about 34% from last year. Similarly, rice will bear over 14% less production than in 2018. Other crops that have been lesser sowed are bajra, maize, jowar, tur, urad, groundnut and soybean. On the other hand, sugarcane and cotton have recorded more sowing up to July 19.