Chand says rice prices likely to stay steady despite weak monsoon; edible oils could push food inflation above 6%
AI Market Summary
Weak Indian monsoon and strengthening El Nino elevate downside risks to rainfed crops, with soybean flagged as most exposed, while rice is buffered by irrigation and stocks. Higher vulnerability in oilseeds and imported edible oils raises the probability of renewed food inflation pressure above 6% in some months, potentially tightening macro conditions and weighing on rural demand if farm output underperforms.
Impact level
● Medium
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▼ Bearish
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Former NITI Aayog member Ramesh Chand and The Indian Express agriculture editor Harish Damodaran said a June monsoon rainfall shortfall, alongside a strengthening El Nino, poses significant risks to rainfed crops in India. They flagged soybean—more than 95% dependent on rainfall—along with cotton, groundnut, pulses and millets as the most exposed. Rice prices, however, are seen as relatively stable because irrigation coverage is high and buffer stocks are comfortable. They also warned that India’s heavy reliance on edible-oil imports, combined with global weather disruptions, could lift food inflation above 6% in some months, according to The Indian Express.
