rainfall: India sees uneven distribution of rainfall, may affect foodgrain production

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.

Acreage for rice which is grown predominantly in rain deficient areas is down around 17% on an annual basis. “Pulses are overall higher, but tur sowing is down nearly 20% YoY, while moong is sharply higher. Also, the sowing of coarse cereals, oilseeds and cotton has risen. Overall, food grain acreage is tracking at -4.6% YoY, as of mid-July,” Nomura said.

As per the IMD, there was 68% deficit rains in Uttar Pradesh, 51% in Jharkhand, 49% in Bihar, 40% in Manipur, 30% in Tripura, 27% in West Bengal, 22% in Delhi, 21% in Mizoram, 18% in Nagaland, and 16% in Uttarakhand till July 20 of the current season.