IANS | 26 Jun, 2023
Deficient rainfall, lower sowing and reservoir levels do not bode
well for the Indian farm sector and inflation, said Motilal Oswal
Financial Services in a report.
Deficient
rainfall and consequently lower rice sowing will push rice prices
higher. Rising global rice prices would further push local prices up.
Rice constitutes around 4.4 per cent of the overall consumer price index
(CPI) basket.
As
of June 22, water reservoir levels stood at about 26 per cent of its
live storage capacity, the lowest in four years mainly led by lower
storage in the southern region of the country, the report said.
The
cumulative rainfall until June 24 has been 30 per cent below normal
compared with 4 per cent below normal last year. Delay in Monsoon can be
attributed to cyclone Biparjoy, which has adversely affected the
progress of rains, said Motilal Oswal.
Apart from the Northwest (27 per cent above normal) Monsoon, all other regions have witnessed below normal rainfall.
Southern
peninsula (51 per cent below normal) and Central India (51 per cent
below normal) have seen the maximum deviation from normal followed by
Eastern and Northeastern regions (19 per cent below normal) of the
country, the company said.
The
Indian Meteorological Department (IMD) expects the upcoming Monsoon to
be normal (96 per cent of long period average- LPA with an error margin
of +/-4 per cent) in its second long-range forecast for the four-month
period from June 2023 to September 2023.
However,
IMD forecasted average June rainfall to be below normal (less than 92
per cent of the LPA). Therefore, the Monsoon is likely to pick up in the
coming months.
According
to Motilal Oswal, as of June 23, Kharif sowing was about 4.5 per cent
less than last year mainly led by rice (minus 36 per cent YoY), cotton
(minus 14.2 per cdnt YoY), Jute and Mesta (minus 12.2 per cent YoY) as
well as oilseeds (minus 3.3 per cent YoY).
Deficient
Monsoon in major rice producing states (with 61 per cent share) such as
West Bengal (28 per cent below normal), Uttar Pradesh (52 per cent
below normal), Andhra Pradesh (38 per cent below normal), Odisha (54 per
cent below normal), Telangana (64 per cent below normal), Chattisgarh
(70 per cent below normal), Haryana (31 per cent below normal) and
Madhya Pradesh (53 per cent below normal) has hurt rice sowing.
States with higher irrigation cover such as Uttar Pradesh, Andhra Pradesh, Telangana and Haryana will be less impacted though.
