IMD's 10% monsoon deficit threatens FY27 food basket; tomato prices already +34% MoM in May 2026
HDFC Bank flags upside risk to its 5.1% FY27 CPI estimate as IMD forecasts a 10% rainfall deficit and El Nino conditions. With food at 37% of CPI and reservoirs at just 41% of live capacity, tomatoes, onions, milk and cereals face price pressure. El Nino years historically add 170 bps to food inflation.
What happened
HDFC Bank · IMD forecasts 10% monsoon deficit and El Nino for 2026, threatening food inflation across tomatoes, onions, milk and cereals. Tomato prices already
Key facts
- 10% rainfall deficit
- tomato prices +34% MoM May 2026
- 90% of LPA
- food = 37% of CPI
- CPI FY27 est 5.1%
- food inflation +170 bps in El Nino years
- reservoirs at 41% live capacity
Why this matters
Accelerate backward-integration M&A in cold chain, contract farming, and regional sourcing to hedge a structural 5%+ food CPI regime through FY27.