KHARIF CROP IMPACT
Micro fin impacted by confluence of factors, last quarter of pain, say executives
Microfinance loan delinquencies are rising due to political events, weather disruptions, and excessive lending. Rural households prioritize food and secured loans over microfinance amidst job losses and high food inflation. Industry executives anticipate improvement next fiscal year as loan books are unwound and repayment capacity stabilizes.
Robust kharif, rabi prospects augur well for private consumption: RBI Governor Das on demand weakness
Market research firms have reported that urban FMCG consumption growth had slowed to nearly 2-3% in the first half of 2023, against 5-6% in the previous year.
Export demand, rainfall delay, damage keep onion prices firm
Onion prices are currently at a five-year high. Export demand and monsoon-delayed harvests are keeping prices firm. The Lasalgaon market sees onions trading between Rs 15/kg and Rs 53/kg. Exports are up 50%. Nafed is selling onions from its buffer stock at Rs 35/kg in some cities. Prices are expected to decrease by mid-December as arrivals increase and quality improves.
RBI's inflation 'horse' is at war but FinMin is not worried
In its monthly economic review, the Finance Ministry highlighted that geopolitical factors will continue to affect domestic inflation and supply chains, despite an expected moderation in the prices of key food items. The economic review said trends in early November indicated a moderation in key food prices, although geopolitical factors are likely to keep influencing domestic inflation and supply chains.
RBI warns unchecked inflation could harm India's real economy, despite strong growth outlook
Despite festive spending and a recovering agricultural sector boosting the Indian economy, rising inflation threatens to undermine growth, particularly in industry and exports, according to RBI researchers. While financial markets experience corrections due to a strengthening US dollar and foreign investment outflows, the RBI remains committed to price stability and growth.
India's Q2 economic growth likely took a hit from heavy rains and corporate struggles: ICRA
India's economic growth is expected to moderate to 6.5% in the second quarter. This is due to heavy monsoon rains and weaker corporate margins. However, government capital expenditure and kharif sowing have shown positive growth. The industrial sector is likely to see the biggest slowdown. Services and agriculture sectors are expected to remain resilient.
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Corporate earnings to improve in 2HFY25 driven by improved govt spending, robust Kharif crop and rural demand: Motilal Oswal
Indian corporate earnings are expected to rebound in the second half of FY25, driven by increased government spending, a strong agricultural harvest, and growing rural demand, following a lackluster first half impacted by reduced spending and weather-related disruptions.
Housing prices keeping consumers away from biscuits? Britannia's Berry flags a concern for FMCG sales
Britannia Industries reported slowing growth in urban areas, attributing it to rising housing costs and low income growth for a significant portion of the urban workforce. While rural growth remained stable, urban demand experienced a downturn, impacting overall FMCG sales.
Here¡¯s how inflated prices of onions, tomatoes, potatoes and cooking oils are impacting the cost of a home-cooked meal
A Crisil report reveals vegetable thali costs surged 20% in October 2024, fueled by soaring vegetable and cooking oil prices, particularly during festivals.
November inflation figures may bear imprint of rise in onion prices
Onion prices in India have surged to a five-year high due to heavy rainfall damaging crops and delaying harvests. This price increase, along with rising costs for potatoes and cooking oil, is expected to impact inflation data for November.
Potato and rice to remain costly till December
Potato prices are expected to stay high until December due to delayed sowing in Uttar Pradesh caused by untimely rains. In addition, Cyclone Dana has damaged paddy crops in West Bengal and Odisha, driving rice prices up by 15% after the removal of export curbs. New potato crops will only reach the market by early December, maintaining high prices.
Excess rains don¡¯t just affect cricket matches; they hurt Indian economy too
India's 2024 monsoon, the heaviest since 2020, brought both relief and chaos. While aiding recovery from last year's drought, the excess rainfall damaged summer crops, contributing to inflation and economic strain. Challenges persist as the country navigates internal issues and global geopolitical tensions.
India-Canada rift: Industry sees no effect on pulses prices
The worsening diplomatic ties between India and Canada, the previous year's largest pulse supplier, are unlikely to increase pulse prices for Indian consumers. Adequate imported stocks, higher domestic production, and alternative sources from Russia and Australia are expected to maintain stable prices.
Demand under rural job scheme drops for 11th straight month
Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme fell for the 11th straight month in September compared to a year earlier. This decline is attributed to strong economic activities, new job opportunities, and favorable weather conditions. About 18.93 million people sought work in September, with numbers coming from 16.02 million households.
Ghodey Pe Sawaar: RBI is in a long-term war
RBI inflation horse: India's central bank has shifted its stance to neutral, balancing inflation and growth. Governor Shaktikanta Das emphasized vigilance due to ongoing global risks. Despite some easing, inflation remains a significant challenge, influenced by geopolitical tensions and high food prices. The RBI remains focused on maintaining its targets.
RBI MPC shifts gear to 'neutral' while retaining repo rate at 6.5%; A look at inflation, GDP targets
Repo Rate: The RBI's Monetary Policy Committee maintained the repo rate at 6.5% due to robust domestic growth and concerns over inflation despite a slight dip in Q1 FY2025 growth. The stance shifted to 'neutral' focusing on growth, cautious of potential geopolitical risks impacting inflation.
RBI MPC Meeting at a Glance: Your one-stop guide for all key decisions
The RBI's MPC, led by Governor Shaktikanta Das, has decided to maintain the current interest rates, keeping the repo rate at 6.5%, the SDF at 6.25%, and the MSF at 6.75%. The committee's stance is now neutral, focusing on inflation trends and maintaining GDP growth projection for FY25 at 7.2%.
Govt weighs herbicide-tolerant BT cotton, glyphosate use as industry pushes
The government is evaluating complex policy decisions on Herbicide-tolerant BT cotton and the widespread application of glyphosate amidst industry pressures. An official committee is examining the implications, while an integrated weed management approach combining mechanisation, herbicides, and herbicide-tolerant varieties is being discussed.
Outlook for inflation trajectory remains positive: FinMin's monthly economic review
The Finance Ministry's monthly economic review suggests a positive outlook for inflation, attributing it to benign core inflation, good monsoon, and healthy Kharif crop sowing. Despite potential regional rain distribution issues, rural incomes and demand are expected to strengthen, leading to milder food inflation.
Vegetable prices surge as rains damage crops and roadways
Vegetable prices have surged due to excessive rainfall damaging crops and roadways in key producing states. Prices of essentials like onions and tomatoes have risen significantly. The government may intervene to stabilize prices by selling vegetables through mobile vans. Traders report delays in sowing and increased pest issues affecting supply.
Growth to hold steady, but global risks Remain: FinMin
The finance ministry anticipates steady economic growth in the coming quarters, driven by increased public expenditure and a strengthening rural economy. Despite a current slowdown in urban auto and FMCG sales, the festive season may boost demand. The June quarter saw 6.7% growth, with strong private consumption and investment.
RBI may do what Fed has done with rates. But you need to wait
Fed rate cut: The Reserve Bank of India may consider a rate cut by February 2025, following the US Federal Reserve's recent 50 basis points rate cut. Despite expected inflation spikes, India's CPI inflation is projected to remain within the RBI's target range. Favorable monsoon activity has positively impacted Kharif sowing, surpassing the five-year average.
Monsoon delivers heavy rainfall: July-August poised to be among the wettest in three decades
India is experiencing one of the wettest July-August periods in three decades, with rainfall totals expected to surpass the long-term average. Enhanced monsoon rains are beneficial for kharif crops and soil moisture. La Nina, initially forecast for August, may arrive by November, with the Madden Julian Oscillation contributing to strong monsoon performance.
SBI report cautions food price rise over possible crop loss due to excess rains
With La Nina getting precedence going ahead, excess rainfalls could result in crop loss and thus a negative impact on food prices, SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Advisor, said. Theoretically, La Nina brings cooler temperatures and a general increase in rainfall in a region. For the whole of 2024-25, retail inflation is likely to average 4.6-4.7 per cent. In June, it breached 5 per cent.
July rains seen crucial as delayed monsoon worries farmers
Delayed monsoon raises concerns over kharif crop cultivation, with only 10% of soyabean area sown in Madhya Pradesh. Farmers in West Bengal and Uttar Pradesh await rains for paddy. Pulses traders are worried about tur and urad crops amid intense heatwave conditions with below-normal monsoon predicted by IMD. Good rains are needed by early July for crops to thrive. Government estimates show mixed output for tur and urad in kharif 2023.
Forecast of ¡®above-normal¡¯ monsoon sparks hope for economy, but there¡¯s a catch!
Amid ongoing impacts of climate change, scientists have been warning us that not all ¡®above-normal¡¯ or ¡®normal¡¯ monsoon seasons turn out to be good for the economy. The inter-seasonal and spatial variations of southwest monsoon rains tend to have a huge effect in terms of both agriculture and natural disasters.
Forecasts of normal monsoons raise hopes of bumper harvests, but intense bouts could play spoilsport
Forecasts have predicted excellent rains over most parts of the country, while scarcities could impact some areas over Northwest, East and Northeast India, particularly in Himachal, Ladakh, Odisha, West Bengal and most of the seven sister states. This could impact the sowing and growth of the kharif crops that are severely dependent on monsoonal rainfall in their early growing stages.
Above-normal Southwest monsoon chances bring hope for India's agricultural sector: Geojit report
Multiple meteorological organisations are predicting above-normal rainfall during this year's southwest monsoon season in the Indian subcontinent. The India Meteorological Department (IMD) forecasts the total rainfall from June to September to be 106% of the long-period average. Last year's southwest monsoon ended with a 6% deficit due to El Nino, causing variations in rainfall distribution. Some regions experienced shortages while others, like West Rajasthan and Saurashtra-Kutch, received ample rainfall. However, 7 subdivisions, including Nagaland, Manipur, Mizoram, and Tripura, experienced deficient rainfall.
Peeling off layer by layer: Regulating onion prices & its crash
Onion prices in the retail trade have fluctuated from ?90 per kg to ?20/kg during the last six months, while the wholesale prices have seen a high of Rs 55/kg and lows of Rs 5/kg during the same period. Shortage in India's last year's rabi crop, followed by erratic monsoon affecting the kharif crop and a robust export demand have been among the top causes for India's onion ongoing problem. During the last few days, the country saw onion prices increase by Rs 5/kg on reports that the central government had decided to lift the export ban, but have again fallen after consumer affairs secretary Rohit Kumar Singh issued a statement that the export ban would continue.
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