Rainfall uncertainty: Risk of rising food inflation again

MUMBAI: Uncertainty over rainfall in the current monsoon has raised concerns over kharif production, which is likely to push up food inflation. Irregular rainfall can result in production of oilseeds and pulses.

The monsoon of the current year is one month away from completion and if there is not enough rain for the progress of the crop, the concern may increase.

In May and June this year, retail inflation surpassed the Reserve Bank's limit of 5-7 per cent. However in July it slowed down again.

Less than normal rainfall will affect the rural economy, agriculture sector circles said. By the end of last week, there was a 5 per cent deficit in rainfall. However, the progress of kharif sowing has been good and it was declining by only 1.50 per cent. However, proper rainfall is required for crop progress after planting.

The government will be forced to increase its relief measures to mitigate the adverse effects of the rains, sources said.

The government will have to get an estimate of what kind of crops may be affected due to low rainfall. By the end of last week, however, the area under cotton had declined by 4.5 per cent to 114.05 lakh hectares.

Compared to August 30, 2020, kharif sowing in the country has declined by 1.4 per cent to 104.5 lakh hectares so far this year.