Early monsoon brings hopes of cooling food inflation

The southwest monsoon arrived in Kerala on Saturday, three days earlier than normal, the India Meteorological Department (IMD) said, raising expectations that good rain this year will temper food inflation.

Rain will also provide relief from the intense summer heat that has hit the wheat crop and triggered a power crisis as temperatures jumped to record highs in north India in March and April.

The monsoon normally arrives in Kerala on June 1 and covers the rest of the country sometime in the second week of July. More than 50% of India's agriculture is dependent on monsoon rain.


"Southwest monsoon has advanced into remaining parts of south Arabian Sea, Lakshadweep area, most parts of Kerala, some parts of south Tamil Nadu, some parts of Gulf of Mannar and some more parts of southwest Bay of Bengal today (May 29)," IMD said.

Conditions are favourable for its advance into the rest of Kerala and Tamil Nadu, as well as parts of Karnataka and the northeastern states, in the next three to four days, the department said.

IMD has forecast normal, well-distributed rainfall across the country, the fourth successive normal monsoon. It's expected to boost the farm sector and dampen inflation pressures. India's retail inflation hit an eight-year high of 7.79% in April, driven by high fuel and food prices.

The southwest monsoon contributes 74.9% to annual rainfall and has a bearing on the economy as it determines rural demand for consumer goods, gold, cars, motorcycles, tractors, and farm equipment, as well as inputs such as pesticides, fertilisers and seeds.

Normal monsoons have helped agriculture record steady growth while the rest of the economy suffered due to the pandemic. The agriculture, forestry, and fishing sectors grew 3.3% each in FY21 and FY22, against a 6.6% contraction in the overall economy in FY21 and an 8.9% rise in FY22.