Erratic Monsoon News Today

Food inflation, erratic monsoon, contraction of exports are some of the reasons for this prediction

Indian equity markets sank in sloppy action last week with persistent selling by overseas investors, triggered by a spike in US bond yields and a rising US dollar index

The erratic monsoon, which is affecting sowing, and global developments will keep the food inflation at elevated levels and would also hit the demand in rural India owing to lower income and inflation, said CARE Ratings in a report.

CARE Ratings said the food inflation will maintain an elevated trajectory in the coming months, gradually receding by October in conjunction with the influx of fresh harvest into the market. The risk to global food prices remains elevated with recent weather-related disruptions in South Asian countries and geopolitical developments.

Erratic monsoon rains in India have delayed vegetable planting and damaged ripening crops, raising vegetable prices to a seven-month high in June. Traders expect costs will remain high until October due to supply shortages. Costlier staples such as onions, beans, carrots, ginger, chillies, and tomatoes are expected to stoke retail inflation, which could hit a seven-month high in July, lowering the potential for the Reserve Bank of India to lower rates this year.

SBI Research, in its latest Ecowrap report, noted that a continued vigil on the evolving inflation outlook is warranted given the erratic progress of monsoon and its impact on Kharif crop sowing, and subsequently on overall food inflation.

The southwest monsoon season ended last Friday, officially, with India receiving above normal rainfall, at nearly 107% of the long-period average. This is the fourth successive year of ‘normal’ or ‘above normal’ rainfall

The study predicts extremely wet years in the future, with potentially grave consequences for over a billion peoples well-being, economy, food systems and agriculture