Document summary
India has now entered the sowing months of July-August. A 20% rain deficit in the first half of July has already cut back rice planting to 7.5% below 2010 levels. Raw cotton sowing is already running 28% lower. The country will likely face a partial drought if the rains do not revive now and unless the rains come agflation will pose a risk to forecasts of a September peak off in inflation. A 5% swing in agflation impacts inflation by 175bp. The monsoon therefore is closely monitored as it holds the key to inflation, rates and growth this year.