Poor rainfall in Gangetic plains may increase food inflation in near term: report | Catch My Job

The deficient rains in the Northern plains, especially in the Gangetic region, are likely to increase food inflation in the near term as overall paddy production will be hit in these areas due to poor monsoon, according to a report.

Major agricultural states, such as Bihar, Jharkhand and Uttar Pradesh, have experienced poor rains during the season just ended, which could lead to an increase in rice prices due to less paddy products in the near term.

The share of these States in general rice sowing in the Kharif season (on 23 September) has decreased to 24.1% from 26% in the previous year, according to an assessment by India Ratings.

This is despite the fact that the 2022 monsoon has been above normal but has not spread sufficiently across the regions. On 30 September, the rainfall was doing well at 92.5cm, which is 6% above the long period average (LPA) of 86.86 cm.

At the disaggregated level, while 12 States/Union Territories had excess rainfall (deviation from LPA more than 20%), 18 States/UTs recorded normal rainfall (deviation from LPA between negative 19% and positive 19%).

However, six States/UTs registered rainfall deficit (deviation from LPA less than negative 20%) and includes the key Kharif crop producing states of Uttar Pradesh, Bihar and Jharkhand, resulting in the 1.2% lower area sown on 109.8 million hectares as of 23 September, which was mainly contributed by a decrease in sowing of paddy (5.5%), pulses (3.9%) and oilseeds (0.8%).

According to the agriculture ministry’s first advance estimate for FY23, Kharif food production is 3.9% lower at 149.92 million tonnes.

Lower Kharif production, particularly of rice and pulses, may exacerbate inflation in these commodities, the agency said.

Inflation in rice and rice products at the wholesale level has already increased by 6.6% in August to a 63-month high, while pulses and products inflation (at the wholesale level), although benign, rose to a six-month high of 2.6 % in the month.

However, the late withdrawal of the monsoon and its spillover into October, bodes well for Rabi production, the report said.