ECONOMY
Farm prices set to surge on supply shock due to uneven rains, crop damage
- IBJ Bureau
- Jul 27, 2025
Uneven rainfall distribution across various States in the country implies a near-term supply shock in prices of key crops, according to a report by ICICI Bank.
The report highlights that crop damage in certain regions, where rainfall has been deficient, could lead to upward pressure on prices.
According to the report, several States have received excess rainfall. Rajasthan recorded 118 per cent above the long-period average (LPA), Madhya Pradesh received 57 per cent above LPA, Gujarat 48 per cent above LPA and Haryana received 24 per cent above LPA.
In contrast, Karnataka (8 per cent above LPA), West Bengal (4 per cent above LPA) and Chhattisgarh (3 per cent above LPA) have received normal rainfall.
“The divergence in rainfall distribution implies a near-term supply-shock in prices of key crops that are produced in affected areas due to crop damage,” the report states
Despite the uneven rainfall, the report mentions that the Kharif sowing has shown positive growth. Out of the normal sowing target of 109.7 million hectares, 70.8 million hectares have already been sown, compared to 68 million hectares in the same period last year. Last week alone, the sown area was 59.8 million hectares.
The report suggests that while overall Kharif sowing is progressing well, the divergence in rainfall could impact crop production in rain-deficient regions and may lead to supply-side price pressures in the near term.
Report By
View Reporter News