Uneven monsoon hits total area under Kharif sowing, stokes inflation worries

India's uneven and moody monsoon this year has led to a reduction in the area sown by Kharif crops in the country, adding to the concerns over already-high retail inflation.
 
As per the data of the Indian Meteorological Department or IMD, the rainfall during the monsoon season has been only 1.4 per cent less than normal. However, it has been distributed unevenly, leading to over 3 per cent decrease in area under Kharif sowing as of July 23 over the normal sowing during the same period, as per the Agriculture Ministry's data.
 
The rainfall in east and northeast India has been 16 per cent less than normal as of July 25, while northwest India has seen a deficiency of 11 per cent. Meanwhile, southern peninsular India has seen 27 per cent excess rainfall, while central India has seen 2 per cent higher rain.
 
The southwest monsoon, which brings rainfall during the June-September period in India, has a direct correlation with the economy of the country. With over 50 per cent of the population dependent on agriculture for income and their farms largely dependent on rain-fed irrigation, a good and widespread monsoon is critical.
 
Monsoon had started with a bang this year, covering most parts of the country by around June 24 - a few weeks earlier than usual. However, a dry period of almost three weeks after seems to have hit Kharif sowing, which takes place from June to around mid-July.
 
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As per the Kharif sowing data of the Agriculture Ministry, the area under coverage at 721.36 lakh hectares was 3.16 per cent lower than the normal as of July 23, while it was nearly 9 per cent lower than during the same period in 2020. The normal data is calculated by taking the average of the previous five years.
 
It must be noted that India had recorded two consecutive years of above-average rainfall in 2019 and 2020.
 
While the area under rice coverage was about 1 per cent below normal, it was lower by nearly 7 per cent compared to 2020. Meanwhile, the area sown under pulses was lower by 12 per cent and 10 per cent over the normal sowing and that in 2020, respectively.
 
The lower area under pulses sowing can also have a direct impact on retail inflation, which eased to 6.26 per cent in June but was above the Reserve Bank's tolerance level of 2-6 per cent. The inflation in pulses had accelerated to double digits during the month.
 
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At a time when the government is already under pressure because of high oil prices, the high rate of pulses can become a concern. Earlier this month, the Centre had imposed a stock limit on pulses to prevent hoarding and check price rise. However, it later relaxed some of the limits due to opposition by traders.
 
Meanwhile, the area under oilseeds sowing also declined by over 10 per cent year-on-year as of July 23. India meets about two-thirds of its edible oil demand through imports and the price of domestic edible oils have more than doubled in the past year.
 
Earlier this month, the Centre reduced the tariff value for the import of edible oil, including palm oil, by up to USD 112 per tonne to cool down the prices.
 
A good monsoon will be critical for the economy recovering from the shock of the second wave of the COVID-19 pandemic. IMD has forecast above normal rains in August and September which can help reduce the deficiency and also lead to higher Rabi showing in winter.

However, with the period for Kharif sowing nearing its end, it is unlikely to lead to a big change in the area under Kharif sowing.

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