Monsoon Tracker - Signs of Weakness - Kotak

Progress of monsoon: sub-normal to normal monsoon

- Till September 6, cumulative rainfall was 4.4% below normal with the weekly rainfall 23.6% below normal. On a regional cumulative basis, most of India was in deficient to normal rainfall with parts of central India and north India remaining deficient. Out of the 36 sub-divisions across India, till date, six have received excess rainfall, 23 have received normal rainfall, and seven have received deficient rainfall.

Retail food price momentum: downward movement in prices

- Average weekly price levels indicate that food prices' movement have been mostly on the downside over last week. Vegetable prices fell 4.1% while pulses prices increased 1%. Cereal prices fell 0.1% while oils and fats prices fell 0.3% over last week in the week ending September 4. We note that this is based on Department of Consumer Affairs daily/weekly data and should not be assumed as the official retail inflation data.

Progress of sowing: acreage marginally lower than last year

- As of September 1, 2017, the total Kharif acreage is 0.6% lower than the same period last year. Rice sowing is 1.5% lower at 36.6 mn hectares. Oilseed acreage is 7.7% lower at 16.7 mn hectares and pulses acreage at 13.8 mn hectares is 38% lower than last year's. Coarse cereals' acreage is 1.5% lower at 18.1 mn hectares. Sugarcane and cotton acreages are at 5 mn hectares (4.6 mn hectares last year) and 12 mn hectares (10.2 mn hectares last year) respectively.

Reservoir levels: deep in red

- Reservoir levels remained in deficit compared to long term average levels. Larger river basins of Ganga and Indus are in surplus while Godavari, Krishna, Mahanadi, and Narmada are in deficit. Overall, reservoirs and basins are around 16% below long term average for week ending August 31.

Source : Equity Bulls

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