Key facts
- India's monsoon season is experiencing below-normal rainfall, impacting key crops.
- Rice and corn production forecasts for the 2026-27 marketing year have been lowered.
- Record carryover stocks are expected to ensure sufficient domestic supplies despite lower production.
- Global food inflation risks are elevated due to the weak monsoon, conflicts, and rising energy costs.
- September rainfall is predicted to be below average across most of India.
India's weak monsoon season is threatening the production of key grain crops, raising concerns about potential global food inflation. The southwest monsoon, crucial for the country's agricultural output, has been weaker than normal, impacting the sowing of kharif crops, particularly rice and corn.
The Indian Meteorological Department has forecast below-normal rains through September, which is expected to further affect planting and yield prospects for most grains. Consequently, the marketing year 2026/2027 rice production forecast has been lowered to 147 million metric tons (MMT), and corn production to 50 MMT.
Despite the reduced production outlook, record carryover stocks from previous years are anticipated to more than offset the decline, ensuring more-than-sufficient domestic supplies. However, the situation poses a risk to global food markets, especially when combined with ongoing conflicts in West Asia and Ukraine, which disrupt fertilizer and fuel supplies.
Experts warn that these factors could contribute to a resurgence of global food inflation by the end of 2026 and into 2027. The UN's Food and Agriculture Organization chief economist noted that higher crude oil prices increase costs for irrigation, packaging, processing, and transportation, while natural gas prices, essential for fertilizer production, are also a concern. Attacks on Russian energy infrastructure have further constrained exports of critical agricultural inputs.
While some reports suggest India's domestic economic impact may be limited due to improving rainfall in late June and July, comfortable reservoir levels, and substantial food grain stocks, the global implications remain a significant watchpoint. The monsoon shortfall is affecting soil moisture, stressing staples like rice, sugar cane, and soybeans, and a rainfall deficit of 14% was already recorded in the first three months of the season.