India: Normal monsoon to support economic recovery, will agri commodity price rally continue in coming days?

Published 2021년 6월 19일

Tridge summary

India is expected to have a normal monsoon this year, according to the India Meteorological Department (IMD) and private weather forecaster Skymet, which is crucial for the country's agricultural activities that support 18% of its GDP and employ over half of its population. This comes as a boost to the agricultural sector, which was the only one supporting the Indian economy last year during a nationwide lockdown. Factors such as global stimulus packages, lower interest rates, and better fiscal policy measures have also contributed to the recovery of agricultural commodity prices. However, factors such as excess rainfall in central India, higher crude oil prices, and a second lockdown could impact the prices of these commodities. The monsoon distribution will play a key role in the direction of agri-commodity prices, along with other factors such as movements in oil prices and the Rupee exchange rate.

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Original content

By NS RamaswamyAt a time when the Second Covid wave is spreading across the country, the good news is that both the IMD and private weather forecaster Skymet have predicted that India is likely to have a normal monsoon again this year. The South West monsoon is crucial for India. It delivers 70% of India’s rainfall and most Agricultural activities depend upon it. Further, the Agriculture sector accounts for about 18% of India’s GDP and employs more than half of the country’s 1.39 billion population.Last year, Agriculture was the only sector that supported the Indian economy while it recorded a slump in manufacturing and other sectors, which were badly hit, mainly due to a nationwide lockdown. Similarly, we expect that this year, normal rains will help support an economic recovery, which is facing new risks from resurgence in Covid cases, during the second wave of the pandemic.Source: IMD, Skymet, Ventura Securities LtdAgricultural commodity prices recovered and outperformed in FY ...

Source: Financialexpress