Branch2 Intelligence

Weak Monsoon Deepens Worries Over Kharif Sowing, Reservoir Levels And Food Inflation: Emkay

IN · 2026-07-04

Key takeaway

Weak monsoon causes 23% drop in Kharif sowing area, raising food inflation fears.

Step 11st-order: Weak monsoon reduces Kharif sowing area by 23%, lowering agricultural output.
Step 22nd-order: Lower output drives food inflation, forcing RBI to hold repo rate higher for longer.
Step 33rd-order: Higher Indian rates transmit to UK gilt yields via global rate co-movement, raising SME financing costs in the UK.

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