Food inflation risk returns: Which essential food items could become costlier after a weak monsoon?

India’s deficient monsoon and declining reservoir levels have raised concerns about the next rabi crop season, with potential implications for food supplies and household budgets. If water shortages affect sowing and crop yields, consumers could face renewed pressure on prices of essential food items, including cereals, pulses and vegetables.

In a column published in The Hindu BusinessLine, agricultural economist A Narayanamoorthy examines the implications of India’s weak monsoon and the challenges it poses for agriculture. The emerging concern is whether the rainfall deficit could affect farm output beyond the kharif season and increase the risk of food inflation in the coming months.

According to the figures cited in the report, 48% of India’s 734 districts received deficient rainfall. Reservoirs held 126.7 billion cubic metres (BCM) of water as of October 15, 24% below the level recorded a year earlier. Storage stood at 44.3% of live capacity, raising concerns about water availability for irrigation during the winter cropping season.

Why cereals and pulses are at risk

The rabi season is important for crops such as wheat, mustard and several pulses. Unlike the kharif season, which largely depends on the southwest monsoon, rabi cultivation relies on a combination of residual soil moisture, irrigation and winter rainfall.

Lower reservoir levels could constrain irrigation in areas dependent on stored water. If farmers reduce the area under cultivation or use less water than required, crop yields could come under pressure.

Wheat is particularly important because of its role in household consumption and the government’s food procurement and distribution programmes. Any significant shortfall in production could affect market supplies and influence prices, depending on opening stocks, procurement and imports.

Pulses are another category to watch. Domestic supplies of tur, urad, chana and other pulses can be sensitive to changes in acreage and yields. If production falls short of demand, prices could face upward pressure, although imports and government stock releases may help moderate the impact.

Vegetables and edible oils: What consumers should watch

Vegetable prices can respond quickly to weather-related disruptions because many varieties are perishable and cannot be stored for long periods. Water shortages, lower yields and transport disruptions can reduce arrivals in wholesale markets, causing short-term price spikes.

Edible oils present a somewhat different picture. Domestic oilseed production, including mustard, could be affected by unfavourable growing conditions. However, retail edible oil prices also depend heavily on international prices, import costs, the rupee’s exchange rate and import duties. A weaker domestic harvest alone does not determine the final price consumers pay.

Will food inflation rise?

A weak monsoon does not automatically translate into higher food inflation. The eventual impact will depend on rabi sowing, reservoir conditions, crop yields, existing stocks, imports and government intervention.

For households, the risk is that higher prices across several food categories could increase monthly grocery bills. For policymakers, the challenge will be to ensure adequate supplies and respond to shortages without allowing temporary disruptions to turn into sustained inflation.

The coming weeks will be crucial in determining whether rainfall deficiencies and low reservoir levels translate into lower crop production or whether irrigation, favourable winter weather and policy measures can limit the damage.