Amid Rain Onslaught, Kharif Sowing Exceeds Last Year's Figures As It Enters Final Stage

Amidst the onslaught of rains over the past week, Kharif sowing continues to pick up momentum, having exceeded last year's levels. Overall sowing area is 4% higher as compared with the same period last year, covering a total of 995 lakh hectares as of Aug. 8, according to data published by the Department of Agriculture and Farmers Welfare.

Sowing areas for rice and coarse cereals exceeded last year's figures despite the variability in monsoons and uneven distribution of rainfall, the data showed. As a share of the normal area coverage, over 90% of the rice, coarse cereals and oilseeds have been sown so far.

Large favourable base effects combined with steady progress of the southwest monsoon, healthy kharif sowing, adequate reservoir levels and comfortable buffer stocks of foodgrains have contributed to a benign inflation outlook for the ongoing year. Still, retail inflation may have troughed in July, when it came in at the lowest in the last eight years and the second-lowest in the current series.

Retail inflation moderated to 1.55% in July, from 2.1% in June, led by a decline in prices of food items. For August, preliminary estimates are tracking at 2.4% annually, reflecting less favourable base-effect, according to estimates by Gaura Sengupta, chief economist at IDFC First bank. High-frequency food prices by the Department of Consumer Affairs is edging higher by 7.5% month-on-month in August compared to a 12% rise in July. The pressure on edible oils prices continues reflecting higher global prices. Core inflation excluding tobacco is estimated at 4.4% annually, due to rise in gold prices, she added.

"We are forecasting headline CPI inflation below 3% until December 2025, our FY26 inflation target having been lowered to 3% from 3.5%, on the assumption of normal monsoons", said Sankar Chakraborti, MD and CEO at Acuité Ratings. Chakraborti forecasts a moderate increase in core inflation to 4–4.6%.