BUSINESS

According to this analysis, rice will certainly become more expensive after rising vegetable costs

Low planting due to insufficient rainfall would raise rice prices, according to a research from Motilal Oswal Financial Services.

The research said that rice makes up around 4.4% of the whole CPI basket and predicted that increasing global rice prices will further increase local costs.

A deficient monsoon has impacted rice sowing in major rice-producing states (with a 49 percent share), including West Bengal (11 percent below normal), Uttar Pradesh (2%), Andhra Pradesh (22%) Odisha (25%) Telangana (35%) Chattisgarh (12%), Bihar (29%) and Assam (2%), according to the report.

States with greater irrigation coverage, such as Uttar Pradesh, Andhra Pradesh, and Telangana, will see less of an effect.

According to the data from Motilal Oswal Financial Services, all other areas have seen below-average rainfall, with the exception of the northwest region, where rainfall was 59% above normal, and central India, where it was 4% above normal.

Rainfall up to July 9 was 2% over average, compared to an 8% shortfall as of July 1 and 3% above average the year before. However, there is still inconsistent rainfall distribution.

The southern peninsula’s rainfall deficit has decreased from 45% below normal last week to 23% below normal right now. According to the research, there is a 17% shortage in the eastern and northeastern districts.

The month of July is significant for growing kharif crops since it normally receives 32% (on average from CY02 to CY21) of the monsoon’s precipitation.

As of July 7, there has been an 8.7% decrease in kharif seeding from the previous year. Lower rice and pulse planting is mostly to blame for this. Even still, the area used for paddy cultivation is down 23.9% from the previous year. According to the data, the area under pulses is 25.8% less than it was the previous year.

Cotton, jute, and oilseed production are also down.

On the other hand, sugarcane (4.7% YoY) and coarse cereals (19.7% YoY) are performing well.

The lowest level in four years of water reservoir levels as of July 7 was 29% of the live storage capacity, mostly as a result of decreased storage in the southern part of the nation.

The India Meteorological Department (IMD) estimates that rainfall in July will likely fall within the “normal” range of 94 to 106% of the long-period average (LPA), which is on the higher half of the range.

The IMD also noted that by the end of July, El Nino conditions are anticipated to emerge, but that they may be counteracted by the emergence of a positive Indian Ocean Dipole (IOD).

The IMD has warned that “below normal” rainfall may occur in July in a few areas of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka, and Tamil Nadu.

According to the paper, it may alter how paddy and pulses are sown in these states.

Despite advancements in irrigation technology over the last two decades, important kharif crops including rice, tur, and peanuts still depend significantly on rainfall.

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