Food crisis, economic shock ahead as country braces for El Niño

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.

India is one of the largest producers of farm products and ranks among the world’s top exporters of rice and sugar. Its farms help to feed almost 1.5 billion people, keep supply-side inflation under check, and sustain 46.1% of India’s workforce, driving consumer spending.

But this crucial sector now faces the heat from the so-called super El Niño. This week I dig deeper to understand what this global weather event holds for India.

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The super El Niño weather phenomenon is emerging as the latest headwind for India’s growth, which is already facing global energy shocks, trade uncertainty with the U.S. and record exits of foreign investors from its equity markets.

From June to September, a key season for its mostly rain-fed farms and reservoirs, India received its lowest rainfall in more than a decade, as per local media reports. It was the fourth lowest since 2001, and the 13th driest since 1901, according to the India Meteorological Department.

Reservoirs in the country were 28% short of full capacity at the end of September and posed a risk to winter crops, according to a report by Nomura on Monday. Several parts of key farm states such as Maharashtra, Andhra Pradesh, Punjab, and Haryana are facing extreme “drought conditions,” Nomura stated.

India and other countries are contending with “significant fertilizer shortages” as key producers in the Middle East and Russia have been impacted by geopolitical conflicts, Foreign Minister Subrahmanyam Jaishankar said at an event organized by the non-profit Asia Society in New York last week.

Jaishankar warned that with the super El Niño added to the mix, “there is going to be a major food crisis” in the coming months. Energy shocks and the flow of money to safe harbors have been “very stressful” for economies of the Global South, he said. The Global South is a term used to characterize less-developed or emerging economies.

Following Jaishankar’s comments, Prime Minister Narendra Modi’s political opponents blamed the government for not acting in time to avert the crisis.

Inflation in India has been rising for 10 straight months, crossing the central bank’s medium-term target of 4% in August, even as economic growth has been resilient so…