India sees healthy 8 pc increase in overall rainfall, positive for inflation outlook

New Delhi, Sep 16 : India saw a healthy 8 per cent increase in overall rainfall above the long-term average (till September 13) as average retail prices of vegetables and milk cooled down, a report showed on Monday.

Cumulative weekly rainfall was 14 per cent above the long-term average (as of September 11).

With overall sowing nearly completed, the focus will now shift towards the harvesting season, as per the ‘Indian Rainfall Tracker’ by Emkay Global Financial Services.

The total area under sowing (109.2 million hectares) is higher (2 per cent YoY) than last year (as of September 6).

This is mainly due to healthy sowing for most major food crops -- rice (41.0 million hectares), pulses (12.6 million hectares), coarse cereals (18.9 million hectares), and oilseeds (19.2 million hectares), said the report.

Overall area under sowing is at 99 per cent of normal area sown, compared with 98 per cent at the same point in 2023.

According to the report, prices have softened in recent weeks due to higher supply, but are expected to remain stable at current levels until the harvest brings more supply to the markets.

The overall basin-wise reservoir levels are in a healthy position and are above the long-term average and last year’s levels.

According to Aditi Gupta, Economist at Bank of Baroda (BoB), most regions of the country have received normal to above normal rainfall which has also translated into an improvement in reservoir storage.

Kharif sowing has shown a steady improvement with acreage 2.2 per cent higher than last year. Pulses and paddy have shown the maximum improvement.

Overall, cumulative rainfall this year remains much higher so far at 817.9 mm, compared with 684.6 mm last year.

“The trajectory of the monsoon has evolved broadly in line with IMD’s projections. This should be positive for the inflation outlook,” said Gupta in the latest BoB update.