India Caps Weakest Monsoon Since 2015, Raising Food Price Risks

A powerful El Niño has left India with its weakest monsoon in more than a decade, threatening crops, draining reservoirs and raising food-price risks in the world’s most populous nation.

Rainfall during the June to September monsoon season was 12.6% below the long-term average, according to the India Meteorological Department. The shortfall was the worst since 2015, when precipitation was 12.7% below normal. The weather office had forecast a 10% decline for this season back in May.

The deficit and an uneven distribution of rainfall are threatening both the current harvest and the next crop cycle, increasing the pressure on already accelerating prices of staples. Food inflation accelerated for a seventh straight month to 5.95% in August, the highest this year, and the weak rains have threatened production of crops from rice to sugar cane and soybeans.

Rainfall was normal in about 42% of the districts assessed by the weather office, while 38% were deficient, Mrutyunjay Mohapatra, director general of IMD told reporters in a virtual briefing.

“Strong El Niño conditions are currently prevailing over the equatorial Pacific Ocean and will continue to strengthen, peaking in November,” Mohapatra said, adding that rainfall is seen below normal across most of the country during the three months through December, except parts of southern and northwest India.

Emerging supply concerns have prompted the government to slash import taxes on edible oils and allow duty-free raw sugar purchases from overseas to curb domestic prices ahead of the festival season. Rising inflation could also push the central bank to raise policy rates for the first time since February 2023, according to a survey.

The monsoon is a lifeline for hundreds of millions of Indian farmers who depend on seasonal rains to irrigate fields in one of the world’s biggest producers of rice, sugar and cotton. It also delivers most of the country’s annual rainfall, replenishing soil moisture and water reserves for crops planted in winter.

The dry weather has depleted reservoirs, putting hydropower generation on course for a fifth straight monthly decline in September and forcing coal plants to run harder to meet industrial and cooling demand. Lower stored-water levels could also threaten the next harvest.

Actual Rainfall Deviation from Normal (%):

Overall rainfall during the monsoon season was 759.4 millimeters, compared with 868.6 millimeters long period average. A storm in the second half of September brought a late burst of rain to parts of eastern India, but not enough to materially alter the national picture. The east and northeast remained the country’s driest regions, ending the season with rainfall 26% below average.