More Stories

Informist, Thursday, Apr. 2, 2026

 

MUMBAI – Presenting a weak monsoon scenario for this year, Barclays India has expressed the possibility of modestly below-normal rainfall during the coming southwest monsoon, with key foodgrain producing states likely to see deficient rains and lower farm output. Although buffer stocks could help, overall food inflation is likely to rise, it said in a report.

 

According to the report, El Nino conditions are set to intensify from July through September, increasing the risk of a rainfall deficit as the southwest monsoon progresses. "Our base case scenario implies around 5–10?low-average rainfall nationally, with the largest deficits concentrated in north-west and north-central India, potentially impacting the sowing of coarse cereals and pulses during the Kharif season," said the report titled 'India monsoon outlook: not a good spell'.

 

However, the downside scenario suggests a stronger El Nino, resulting in a rainfall deficit of as much as 20%, the report said. El Nino is linked to drier and hotter weather in India, while La Nina results in more favourable rainfall.

 

Arguing that the correlation between India's agriculture output and the intensity of monsoon rainfall is weakening, Barclays said that in its base case scenario, it is not overly concerned about the risk of runaway food inflation. "In the event of a supply shock, we would expect the government to offload buffer stocks of food grains to keep prices in check," it said.

 

"However, if the 'downside case' materialises, implying 20?low-normal rains (drought-like conditions), then sowing and output both may decline. In this case, apart from dipping into buffer stocks, the government may also look to put in place export restrictions for

impacted crops," it said.

 

Price trends for major kharif crops such as rice, pulses, cotton, and coarse cereals will likely come under focus due to the upcoming El Nino, the report said. Inflation trends in horticulture crops such as fruits and vegetables will also be monitored, given the more limited storage potential for these items. "The impact on food inflation from a deficient monsoon will ultimately be determined by a combination of supply (production, existing stocks) and demand factors," the report said.

 

June rainfall is expected to be broadly normal, Barclays said. The impact of the incoming El Nino climate pattern is expected to strengthen through the monsoon season, increasing the risk of rainfall deficit as the year progresses. Rainfall in July could be below average across large parts of the country, the report said. August and September are the months most at risk of precipitation deficits this year, it said.

 

Spatial analysis indicates that the states of Haryana, Uttar Pradesh, and Madhya Pradesh are likely to experience the largest deficits, potentially impacting sowing of coarse cereals and pulses, the report said. Temperatures are also expected to be above average, increasing the risk of crop stress, power demand volatility, and more concentrated bursts of rainfall that could result in flash flooding, it said in the report.

 

While the El Nino is a dominant climate driver for the southwest monsoon, the Indian Ocean Dipole and the Pacific Decadal Oscillation also impact rainfall, Barclays said. The Indian Ocean Dipole is expected to remain neutral throughout the year, removing a potential offsetting mechanism that has buffered El Nino impacts in some past years. The Pacific Decadal Oscillation is expected to stay negative throughout 2026, which may modestly temper the impact but not eliminate the suppressing signal.

 

The Indian Ocean Dipole is the difference in surface temperatures between the eastern and western tropical Indian Ocean. A negative Indian Ocean Dipole leads to less rainfall in India, while a positive index leads to more rainfall and a neutral phase signals no significant change in precipitation.

 

The Pacific Decadal Oscillation is a long-lived, Pacific-basin climate pattern that shifts between warm and cool phases every 20 to 30 years. It mainly influences sea surface temperatures and atmospheric pressure in the North Pacific or North American sector and often acts as a long-term modulator of El Nino-Southern Oscillation.  End

 

Reported by Abhijit Doshi

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.