Monsoon-induced supply disruptions hold key to vegetable inflation ahead

While the monsoon has been fairly normal so far, rain-induced supply disruptions and damage to standing crops in areas adjoining major cities has already started pushing up vegetable prices

Over the past month, wholesale prices of major vegetables in Delhi’s Azadpur market has shown a mixed trend with prices of some, such as tomatoes, increasing by almost 45 per cent. The price spike is not limited to tomatoes but has also spread to other common green vegetables, with parwal (pointed gourd) rising 33 per cent and lauki (bottle gourd) jumping 50 per cent.

 

Others such as ladies finger, green chillies, and brinjal have seen a decline, with rates dropping by around 38 per cent, 55 per cent, and 15 per cent, respectively, as per data from agmarknet.in.

 

As the southwest monsoon takes a much-needed break, data released Tuesday shows that July retail inflation has dropped to an eight-year-low of 1.55 per cent. The last time retail inflation was lower than this was in June 2017.

 

The drop has been mainly due to cheaper vegetable and pulses prices, but would have been sharper had it not been cushioned by higher edible oils and fruit prices.

 

Most experts and commentators expect that the weakening trend in Consumer Price Inflation (CPI) will continue in August as well.

 

Rain may play spoilsport

 

However, the monsoons will likely play an important role here as tomato prices have already started showing an uptick over the past few weeks due to rain-induced damage to standing crop and supply disruptions from the hinterland.

 

The Indian Meteorological Department (IMD) has predicted that the monsoon trough that had slightly shifted in the current week will resume its normal trajectory from August 14 onwards causing heavy rains over Central, West and Peninsular India.

 

“Overall, rainfall activity is likely to be above normal over most parts of Peninsular and Central India; below normal over most parts of western Himalayan states, east and north east India and near normal over the rest of the country during the week," the IMD had said in its last forecast.

 

Rain-induced supply disruptions and damage to standing crops in areas adjoining major cities has already started pushing up vegetable prices; their impact on food inflation in the coming days remains to be seen.

 

But if the rains resume their vigorous march, as predicted by the IMD, there is a possibility that inflation in food items, particularly vegetables, won’t remain benign for long.

 

Paras Jasrai, associate director at India Ratings and Research, said in a statement that with the uptick in tomato prices so far (till August 11, 2025), retail inflation is expected to swing up to 2.1 per cent in August 2025.

 

CareEdge in a report said that in the food basket, there was deflation in key items such as vegetables, pulses, spices, and meat. Looking ahead, food inflation is likely to remain contained, supported by healthy agricultural activity and a favourable base.

 

Good progress of monsoon, adequate reservoir levels, and strong kharif sowing bode well for agricultural output and food price stability. But, it also added that close monitoring of the monsoon’s spatial and temporal distribution will remain crucial.

 

Monsoon largely normal so far

 

Between June 1 and August 10, the country recorded 539 mm of rain against a normal of 535.6 mm, about 1 per cent above the long-period average (LPA).

 

Of the 36 states and union territories for which the IMD provides figures, 25 are in the 'normal' category (within 19 per cent of the long-period average), five are 'deficient' (20 to 59 per cent below normal), five are in the 'excess' category (20 to 59 per cent above normal) and one (Ladakh) is in the 'large excess' category (more than 60 per cent above normal).

 

No state or union territory is in the cumulative 'large deficient' category for the period.

 

Arunachal Pradesh, Assam, Meghalaya, Sikkim and Bihar have recorded seasonal shortfalls.

 

Arunachal Pradesh gauged 652.1 mm against a normal of 1,081.0 mm (about 40 per cent below normal), Assam 603.8 mm (37 per cent below normal), Meghalaya 978.7 mm (45 per cent below normal), Sikkim 837.4 mm (20 per cent below normal) and Bihar 438.3 mm (25 per cent below normal).

 

Five states or union territories are in the excess category: Jharkhand (853.7 mm; 41 per cent above normal), Delhi (433.5 mm; 37 per cent above normal), Rajasthan (430.6 mm; 58 per cent above normal), Madhya Pradesh (745.3 mm; 30 per cent above normal), and Puducherry (258.2 mm; 32 per cent above normal).

 

Ladakh stands out in the large-excess column with 31.8 mm rainfall against a normal of 14.8 mm, or almost 115 per cent above normal.

 

The 25 states and UTS that recorded totals within ±19 per cent of the LPA include Uttar Pradesh (478.0 mm; 11 per cent above normal), Maharashtra (585.2 mm; about 9 per cent below normal but within the normal band) and Karnataka (587.8 mm; 10 per cent above normal).

 

While the cumulative picture shows most the country close to normal, the season has been marked by sharp spatial and temporal variability.

 

Parts of the western Himalayas, especially Himachal Pradesh and Uttarakhand, have seen cloudbursts, flash floods and widespread landslides in July and early August, disrupting roads and local life.

 

The national capital region also faced episodes of heavy downpour and waterlogging in late July and early August.

 

The IMD has noted the unevenness of rainfall so far and expects the second half of the monsoon (August-September) to be generally wetter, with above-normal rainfall likely over the country as a whole.

 

However, some pockets, including parts of the northeast and adjoining eastern India, are expected to remain on the drier side.

 

The IMD has also said that northeast India has experienced below-normal rainfall for several consecutive years and warned of continuing regional differences in rainfall activity.

 

In May, the IMD predicted that India would receive 106 per cent of the LPA of 87 cm during the June-September monsoon season. Rainfall ranging between 96 and 104 per cent of this 50-year average is considered normal.

 

The monsoon plays a critical role in India's agriculture sector, which supports the livelihood of around 42 per cent of the population and contributes 18.2 per cent to the national GDP. It is also crucial for replenishing reservoirs used for drinking water and power generation.