Pick-up in monsoon activity in last week of Jun-24, saw all-India cumulative rainfall deficiency narrow down to 11% as of Jun-24 end, versus of 20% earlier in the month.
Download ReportQuantEco Research || India Monsoon Flash: Hopes pinned on Jul-24 outperformance
The late spurt of rainfall activity is expected to be followed by 'Above normal' performance in Jul-24, as per IMD's forecast released earlier today. A favourable rainfall prognosis has also pushed Kharif sowing in the last one week, with area sown recording a robust expansion of 33% on annualised basis as of 28th Jun-24. A pick-up in rainfall activity will be critical in Jul-24, as the month accounts for nearly a third of the season’s rainfall and close to 50% of the season’s Kharif sowing. A good Kharif output should be able to lend a meaningful downside to domestic food price pressures, that have been amplified by the heatwaves in Jun-24. High frequency mandi prices have recorded a sharp sequential increase in vegetable prices, to the tune of ~22% in the month gone by. For FY25, we continue to expect CPI inflation to moderate to 4.5% from 5.4% in FY24 for now, riding on the comfort of core and fuel inflation. On serious watch however would be the food inflation trajectory that could potentially disrupt the CPI forecast.