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.
IMD forecasts 10% monsoon deficit and El Nino for 2026, threatening food inflation across tomatoes, onions, milk and cereals. Tomato prices already up 34% MoM in May. HDFC Bank pegs FY27 CPI at 5.1%, with upside risk.
Why this matters
HDFC Bank's caution on FY27 CPI marks a sharper inflation stance, citing concrete supply-side stress in tomatoes, onions, milk and cereals as reservoir levels and rainfall outlook deteriorate.
Retail-brand signals steady at 732 over the last 90 days.