El Niño and Iran sharpen India’s food prices challenge
The southwest monsoon was 39.8 per cent below normal in June, with the all-India average rainfall of 99.5 mm the fifth lowest recorded for that month after 2014, 2009, 1926 and 1905. This month, whichcoincides with the peak plantings of the kharif crop, has been better so far. Not only has the cumulative rainfall deficit for the season (June-September) narrowed to 24.1 per cent as on July 5, the monsoon has advanced to cover roughly 95 per cent of the country’s area. That should, in turn, help boost kharif sowing acreages, which were overall 22.7 per cent lower compared to last year’s coverage till June 25. The lag was even more for oilseeds (53.3 per cent), pulses (30.5 per cent) and cotton (34.6 per cent). Those gaps can potentially close with the monsoon’s revival from June 30. But the outlook, on the whole, is still not great. The India Meteorological Department has forecast average rainfall over the country for July, too, to “most likely to be below normal”. Worse, the dreaded El Niño is in a “moderate” phase now, while predicted to intensify into a “strong” event during the second half of the monsoon season and turn “very strong” over October-January. The impact wouldn’t be limited to the monsoon rainfall and the kharif crops grown during this season. Since El Niño is known to suppress rainfall and also raise temperatures, it could result in a relatively short and warm winter, affecting the upcoming rabi season crops like wheat, mustard, chana, masoor and potato as well. The last “strong” El Niño event of 2023-24 led to annual retail food inflation averaging over 8.5 per cent between July 2023 and December 2024. Without proactive supply-side management, there is every risk of a repeat of that protracted episode of elevated food prices. India imported a record 16.9 million tonnes (mt) of vegetable oils in 2025-26 and 7.3 mt of pulses the previous fiscal. El Niño — which has overtaken Iran as the No 1 risk factor for the Indian economy today — will make further imports inevitable. While keeping the import window open, the government must ensure minimum support prices for pulses, oilseeds, millets and cotton through payment of the difference over open market rates. It will incentivise farmers to cultivate these crops, instead of water-intensive rice, wheat and sugarcane. The year 2026-27 will also test the flagship crop insurance (PMFBY) and rural employment (VB-G RAM G) schemes. Their implementation on the ground matters as much as the supply-side measures to control food inflation.
- 1From a governance and federal-structure lens, agriculture is a State List subject under Entry 14 of the Seventh Schedule, meaning states primarily administer crop policy while the Centre controls trade and price-support mechanisms like Minimum Support Price (MSP), announced by the Cabinet Committee on Economic Affairs based on Commission for Agricultural Costs and Prices (CACP) recommendations. This divided competence often complicates rapid, coordinated responses to climate shocks like the one described in the editorial.
- 2As a domestic economic policy matter, India's reliance on imports to bridge supply gaps, evident in the record 16.9 million tonnes of vegetable oil imports cited, links to broader food security policy under the National Food Security Act, 2013, which guarantees subsidised foodgrain to about two-thirds of India's population; a poor monsoon raises the fiscal cost of maintaining these entitlements through the Food Corporation of India's procurement and buffer stock operations.
- 3On the legal and regulatory front, the Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016 under the Ministry of Agriculture, is the primary crop insurance scheme referenced in the editorial, while the Essential Commodities Act, 1955 empowers the government to regulate stocking and trade of essential food items during price surges, a tool often invoked during high-inflation periods like 2023-24.
- 4Economically, the editorial's data shows kharif sowing was 22.7 per cent lower than the previous year as of late June, with oilseeds and pulses most affected, while the 2023-24 strong El Niño episode had already pushed average retail food inflation above 8.5 per cent for eighteen months. With India importing 7.3 million tonnes of pulses in the prior fiscal year alone, any further monsoon disruption directly threatens the Reserve Bank of India's inflation-targeting mandate, which requires keeping retail inflation within a 2 to 6 per cent band under the flexible inflation targeting framework adopted in 2016.
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