Crisil Ratings in a recent report has said the heatwave across India will largely affect vegetables grown in summer. Heatwaves have affected many regions in the last few months. Initially it affected the easter part of the country, where West Bengal, Odisha were worst affected. Now, in the last 9-12 days, Delhi NCR, Haryana, Gujarat and Rajasthan are facing intense heat.
This has raised prices for various goods. The impact on inflation from the May 24 heatwave seems less severe than in the past, potentially lowering estimates for perishables and CPI inflation. Noting the heatwave effect, Crisil Ratings said that farmers may look to grow less water-intensive crops in the future.
“The spell of heatwaves this year began in April in the eastern and southern parts of India, while May has mostly seen heatwaves in Northwest and central India. This year’s heatwave occurs outside the cropping season for major crops, unlike in 2022, when it hit during the wheat harvesting period in March. However, the impact could be borne by vegetables grown in summer, which could be mitigated by farmers shifting their cropping patterns; or even growing heat-resistant crops such as millets in the current summer period,” the report stated.
IMD rain forecast
The report noted that although the India Meteorological Department’s (IMD) has predicted above-normal rainfall for the 2024 southwest monsoon, forecasting rainfall at 106% of long period average (or LPA) between June and September, the uneven distribution can bring in possible worries for states in east and north-eastern parts, which are expected to receive below-normal rainfall.
“Healthy, timely and well-distributed rains can lift agriculture incomes by bolstering rural demand, which was impacted in the past fiscal and is currently showing some signs of revival. Robust crop output can control food inflation that has been hovering above 8% for six months. Combating food inflation, with non-food inflation already being low, can provide policy room for interest rate cuts,” the report stated.
The IMD forecasts normal rains in June, but above-normal temperatures in most parts of northwest and adjoining areas of central India (charts 2 and 3) that could cause some disturbance. Rainfall in July and August is crucial for agriculture, as most sowing activities take place during this period. However, the fields are ploughed and sowing begins in June.
The report further added that the above-normal temperatures predicted in the month could impact the availability of labour or the ability to work under extreme conditions. High temperatures also bring other challenges such as further depletion of reservoir levels, which are already 24% below capacity — due to faster evaporation.
In 2023, despite a normal overall southwest monsoon, its uneven distribution across states impacted many crops. Of the states expected to receive deficit rains this year, Jharkhand, Bihar, West Bengal and Odisha require monitoring as they were impacted last year as well. “Rice, tur and coarse cereals warrant a closer watch as last year’s uneven rains impacted production and pushed up inflation rates for these crops. Rice, for instance, saw an average inflation rate of 12.2% in fiscal 2024, tur 33.4% and coarse cereals 10.9% in 2023-24,” the report noted.
