The Signal (weekly highlights)

1. Rainfall 44.6% higher than LPA in week ended 22 June

India received 63.5 millimeters rainfall during the week ended 22 June 2022. This was 44.6 per cent higher than the long period average (LPA). Of 36 meteorological subdivisions, seven received normal rainfall (up to 19 per cent below or above LPA). Six subdivisions received excess rainfall (20-59 per cent above LPA) and 13 subdivisions received large excess rainfall (60 per cent or more above LPA). Of the remaining, six subdivisions received deficient rainfall (20-59 per cent below LPA), while large rainfall deficiency (60 per cent or more below LPA) was seen in four subdivisions.

India witnessing good rainfall almost 45% higher than LPA is a boon for farmers as well as FMCG companies to revive rural demand.

2. Edible oil prices plunge to USD 300 per tonne in global markets.

Global edible oil prices have plunged to USD 300 per tonne, its lowest level in six months and are expected to decline further. This is because three main concerns of the market which include supply of sunflower oil from Ukraine, Indonesia’s ban on exports of palm oil and the shortage in production of palm oil that curbed supplies have eased.

With edible oil prices plunging to a six-month low in global markets and are set to decline further, consumers can heave a sigh of relief. The development is also likely to allow the Indian government to breathe easier on concerns over surging inflation.

3. Economist suggest that RBI likely to hike policy rates by 50-75 bps in remaining fiscal.

Economists opine that a combination of normal monsoon and policy tightening by the Reserve Bank of India (RBI) will aid in cooling down inflation by the end of 2022. although there are some additional policy options for addressing broader price pressures such as reduced excise duties, lower value-added taxes or direct subsidies on agricultural produce, emphasis will be on monetary policy to control rising inflation.

However, these have  its own limits and cannot fully offset the impact of imported inflation which besides high prices also seeps into the economy via rupee depreciation. Economies expects another 50-75 bps hike in the reminder of 2022-23. They believes that inflation is more of a result of supply chain disruptions, both globally and domestically. Moody’s expects the benchmark repo rate to be increased by another 60 to 80 basis points in 2022.

4. Coal stocks with mines enough to run power plants

Coal stocks with various coal mines have risen to more than 52 million tonnes (MT) as of 16 June 2022, which is sufficient for about 24 days’ of fuel required for power plants in the country. In addition to it, about 4.5 MT of coal stock is available at various goods shed sidings, private washeries, and ports and is awaiting to be transported to the power plants. About 22.6 MT is available with the power plants.

India’s coal production from 1 April 2022 to 16 June 2022 rose by 28 per cent as compared to a year ago. The domestic coal production target for the year 2022-23 is set at 911 million tonnes, 17.2 per cent higher compared to the previous year.

5. DoT extends telecom PLI by 1 year

The Department of Telecom (DoT) has introduced an incentive scheme for design-led manufacturers and has extended the period of Rs.121.95 billion production-linked incentive (PLI) scheme by a year. From 21 June 2022 to 20 July 2022, the application window will be open. The incentives will be paid out of the remaining Rs.40 billion of the total outlay.

The DoT has chosen to extend the existing PLI scheme by one year based on the feedbacks from stakeholders, including the selected PLI applicants. Existing PLI beneficiaries will be able to choose between 2021-22 or 2022-23 as their first year of incentive.