Indian rainfall conditions were broadly unchanged last week. Cumulative rainfall between 1 June and 3 September was 12% below normal, unchanged from the previous week. The geographic distribution however has deteriorated, with 18 out of 36 regions reporting normal rainfall conditions (21 last week), and another 9 close to normal levels.



The monsoon season is now coming closer to an end. With 83% monsoon season is over, the deficit in rainfall is unlikely to change significantly, and even if remaining weeks have normal rainfall, the deficit is likely to be above 10%. The Indian Meteorological Department (IMD) has maintained its forecast of a 12% shortfall in rainfall for the season.

"However the impact on food prices has been somewhat muted, with prices of some commodities, including onions and pulses, rising. In order to have control over prices, the government has ordered minimum onion export prices to be hiked, imports of onions to be carried out", says Barclays.



Government has also indicated it will sell imported pulses at a discount to states in order to keep a lid on inflation. Overall sowing activity during the kharif (summer) season however continues to moderate; as of 28 August, sowing was up ~1% relative to 2014.