People beware..! Fear of rising food prices..!?
With three months left for monsoon, drought-like conditions are predicted. In this situation, there is a growing concern across the country that the El Nino effects will increase food inflation in India. Inflation is also predicted to be very high while agricultural production is likely to decline in the current financial year. The Pacific Ocean has El Niño and La Niña climate patterns. Both of these have the potential to affect the global climate. While india benefited from the La Nina effect, El Niño creates dry and hot summers and monsoon deficits. As El Niño effects severely affect India's agricultural production, there is a chance of a large increase in commodity prices and consumer inflation. It has not stopped raising yet, the main reason for this is that inflation continues to increase due to various reasons, and interest rate is the only important tool to control it.In this context, russia has been reducing its crude oil production since March, which has been a major factor driving up the price of overall manufactured goods. This will affect india as well, even though russia gives a discount, it is based on the international market price. In this difficult situation, the El Nino forecast that monsoon rains will decrease and food prices will increase has caused a great shock. India has not experienced major droughts recently, on the contrary, we have been exporting everything from rice to pulses and vegetables to the countries of the world. In this situation, there is a 55-60% chance of El Nino in india during the months of June-December. This not only affects the overall consumer market but also has a huge impact on pushing poor people further into poverty.The US-based National Oceanic and Atmospheric Administration (NOAA) has predicted an El Niño with a 55-60% chance of developing in June-December 2023. This is bound to adversely affect the indian monsoon between june and October. Of the six times NOAA said the chance of an El Niño in february was 45% or higher, only three years actually produced an El Niño, while the rest of the time the monsoons were normal. However, the prediction for El Niño in 2023 is 55-60%. And this amount is the highest forecast in several years, Jeffries said in his paper.Similarly, according to a study report by Emkay Global, all drought years and events in the last 20 years were El Nino years. This year's drought will lead to worse price fluctuations, compounding the already tight supply situation. The severe price hike will further tighten the government's fiscal position. This is because minimum support price increases should be higher to ensure reasonable returns to the agricultural sector. But Emkay Global also said that due to higher retail prices, the government will reduce its capacity to procure grains.