Inflation will become uncontrollable due to the effect of El Nino
El Nino has severely affected the production of essential crops like pulses, sugar, telabia and rice in the country. It is considered to be the strongest El Nino ever. There are fears that this may force India to import food items. Additionally, India may have to increase imports of animal feed and agricultural raw materials this fiscal. According to sources, drought has reduced crop production, raising concerns about supply. Meanwhile, the industry is demanding ease in imports to control costs. The sugar industry has received permission to extend the deadline for importing raw sugar. Imports of edible oil may also need to increase along with imports of soybean meal and maize. Production of soybean and groundnut is expected to decline during the Kharif season. Additionally, there are concerns about the winter mustard crop, which may lead to an increase in edible oil imports. The poultry industry is seeking permission to import soybean meal and corn. Similarly, textile companies are demanding removal of import duty on cotton. The starch industry fears that it may have to import starch from China if a large share of corn is diverted to ethanol production. Soybean imports from African countries to India have reached a record level. The reason for this is that the crop was affected due to excessive rain last year. Soybean shortage is expected to continue this fiscal year. Because crops have failed due to drought in parts of Marathwada, Vidarbha, Telangana and Madhya Pradesh. India meets about 54 to 56 percent of its total edible oil consumption through imports. India imports about 15 to 16 million tonnes of vegetable oil annually to meet its domestic shortage. The total import in 2024-25 was 166.63 lakh tonnes.