Sharda Cropchem warned that a projected El Niño could increase agricultural commodity prices in India by 10% to 15% [1].
This potential price surge threatens food security and inflation in a region where rain-fed crops depend heavily on the southwest monsoon. A weakening of these rains typically reduces crop yields, driving up the cost of essential staples for millions of consumers.
RV Bubna, a representative of Sharda Cropchem, said prices could rise by 10% to 15% [1]. To prepare for the shifting market conditions, the company plans to increase its investment from Rs 525 cr to Rs 550 cr [1].
The weather phenomenon, described as a "super El Niño," is expected to peak between late 2026 and early 2027 [2, 3]. This warming of the Pacific Ocean often disrupts rainfall patterns in South Asia. Some reports indicate this could be the most dangerous monsoon in 25 years [4].
Economic analysts have highlighted the direct link between rainfall and production. Sakshi Gupta, a principal economist at HDFC Bank, said every 1% deviation in rainfall from the long-period average tends to reduce agricultural output by around 0.4 percentage points on average [5].
Other projections align with the warning of significant inflation. A science editor at Business Today said a super El Niño could push food prices up by double-digits as the monsoon falters [2]. While some estimates suggest a range of 8% to 12% [2], Sharda Cropchem's forecast suggests the impact could reach as high as 15% [1].
Agricultural sectors in India are particularly vulnerable because a large portion of the land lacks irrigation systems, making the timing and volume of the monsoon critical for the national economy [2, 5].
“Prices could rise by 10-15%.”
The convergence of a 'super' El Niño event and India's reliance on monsoon rains creates a high-risk scenario for food inflation. When agricultural output drops due to rainfall deficits, the resulting price hikes can trigger broader economic instability and increase the cost of living for the population. Sharda Cropchem's decision to increase capital spending suggests that industry players are bracing for volatile market conditions and potential supply chain disruptions.
