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Uneven Rains Threaten India's Crop Prices: ICICI Bank Report
23 Jul
Summary
- Uneven rainfall distribution across India may cause near-term supply shock in crop prices
- Certain states face excess rainfall, while others experience significant deficits
- Overall kharif sowing shows positive growth, but regional disparities could lead to price pressures
According to a recent report by ICICI Bank, the uneven rainfall distribution across various states in India is expected to cause a near-term supply shock in crop prices. The report highlights that crop damage in certain regions, where rainfall has been deficient, could lead to upward pressure on prices.
The report provides specific data on the rainfall patterns across different states. Several states, including Rajasthan, Madhya Pradesh, Gujarat, and Haryana, have received excess rainfall, ranging from 24% to 118% above the Long Period Average (LPA). In contrast, key agricultural states like Bihar, Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra, Punjab, and Uttar Pradesh have experienced lower-than-normal rainfall, with deficits ranging from 2% to 42% below LPA.
Despite the uneven rainfall, the report mentions that the overall kharif sowing has shown positive growth, with 70.8 million hectares already sown compared to 68.0 million hectares in the same period last year. However, the divergence in rainfall could still impact crop production in rain-deficient regions and lead to supply-side price pressures in the near term.
