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India faces food inflation risks as monsoon, El Niño threaten output

Standard Chartered flags deficient monsoon rains and low reservoir levels, with pulses, vegetables, sugar and oilseeds seen as the most exposed and potential upside risks to FY27 CPI.

Reported · Written up by our desk · Major Pairs

Standard Chartered warns India’s inflation outlook faces growing risks tied to weaker-than-needed monsoon rains and a persistent El Niño, arguing that the resulting hit to food output could lift consumer prices. The bank points to reduced sowing and low reservoir levels, saying the most exposed areas include pulses, vegetables, sugar and oilseeds. It also highlights that weather-driven food costs could produce upside risks to India’s FY27 CPI inflation. In its analysis, Standard Chartered also links the inflation risk to possible monetary tightening, noting that food-price spikes could raise the case for repo rate hikes if prices rise faster than expected.

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