Indian Monsoon Risks Building Bearish 90% Rainfall Hit

The Indian monsoon is advancing slowly and unevenly in 2026, raising the prospect of a difficult agricultural year. The India Meteorological Department (IMD) has forecast seasonal rainfall at about 90% of the long-period average (LPA), citing the onset of El Nino conditions over the equatorial Pacific.

The LPA for the June to September season is roughly 87 cm based on 1971 to 2020 data, according to IMD. The agency places the probability of a deficient season, defined as below 90% of LPA, at well above the long-term climatological norm.

Uneven Monsoon Progress Leaves Two-Thirds of India Short

The monsoon reached Kerala on June 4, slightly later than in the previous two years. The Bay of Bengal branch has since moved steadily through the northeast, West Bengal, Bihar, Odisha, Jharkhand, and parts of the southern peninsula.

The western advance has stalled. Maharashtra, including Mumbai and Pune, and Gujarat remain dry, with full arrival possibly delayed until late June.

Distribution has been sharply skewed. The south and northeast have received showers while north India endured a severe heatwave. More than two-thirds of the country recorded deficient rainfall in the first 11 days of the season.

Why the Rainfall Deficit Has Taken Hold

The IMD declared El Nino on June 13, 2026. The pattern weakens monsoon winds and reduces the moisture carried inland, the central driver of the current rainfall deficit.

Dry, sinking air over the west coast around Konkan, Mumbai, and Pune has held back moist monsoon winds. The absence of low-pressure systems and cyclonic storms has further limited the pull of moisture-laden winds toward western India.

The Arabian Sea branch has stalled while the Bay of Bengal branch progresses faster. The result is the lopsided coverage now visible across the subcontinent.

Kharif Sowing Slips as Cotton Bears the Brunt

Kharif sowing began slowly, reaching 7.25 million hectares by June 5, around 200,000 hectares below the same point last year. The shortfall reflects both the late onset and the patchy spread of early rains.

Cotton has seen the steepest decline. Plantings fell to 751,000 hectares from 972,000 hectares a year earlier, a drop of 22%. Rice is marginally ahead at 285,000 hectares against 265,000 hectares, though the bulk of paddy planting still awaits a faster monsoon.

Soil moisture deficits are reported across Odisha, Chhattisgarh, Haryana, Karnataka, Maharashtra, West Bengal, and Andhra Pradesh. With about 55% to 60% of the net sown area dependent on rain, rainfed pulses and oilseeds are the most exposed. Oilseed sowing is already down about 10,000 hectares, and the agriculture ministry has flagged 200 districts for possible El Nino-linked stress.

Food Inflation and Rural Demand Move Into Focus

The macroeconomic stakes are significant. Agricultural growth could slow to between 3% and 3.5% in the December quarter, against 6.6% a year earlier, if the rainfall deficit persists.

Food inflation risk is rising for pulses, edible oils, vegetables, onions, tomatoes, milk, and cereals. Retail inflation could edge toward 5% in FY27, and the Reserve Bank of India has flagged a weak monsoon as an upside risk to prices, particularly food.

A below-normal monsoon also pressures farm cash flows and rural demand. Water availability is a parallel concern, with storage across 166 major reservoirs down to about 28% of capacity, tightening prospects for irrigation in the next season. A delayed monsoon arriving three weeks late is estimated to cut rice yields by 2% to 3.4% and cotton yields by 5.2% to 8.6%.

A Possible Late Reprieve

There is a path to relief. Forecasts point to a positive Indian Ocean Dipole potentially setting in during late July or early August, which could blunt the El Nino impact and revive rainfall through August and September.

Such a turn may arrive too late for much of the kharif crop but could support rabi sowing. The timing will determine whether the season ends in a manageable shortfall or a sharper deficit.

Global Ripples Through Pulses and Cereals

The fallout extends beyond India. A weak Indian monsoon can reshape global pulses and cereals markets, where India is both a major producer and a swing importer.

Other Asian producers face the same El Nino pressure, raising the prospect of firmer rice prices across the region. Buyers and processors will watch the next four weeks of monsoon progress closely, as the gap between a 90% season and a deeper rainfall deficit carries outsized weight for prices and supply.

Conclusion

The combination of El Nino, below-normal rainfall at 90% of LPA, and uneven distribution has created clear downside risks for India's farm sector, food prices, and rural economy across FY26 and FY27. A late-season positive Indian Ocean Dipole offers the main hope of mitigation, but for now the monsoon's slow, lopsided advance keeps the balance of risk tilted to the downside.