• El Nino and irrigation: The impending severe 2026 El Nino threatens reservoir and groundwater replenishment, creating significant yield risks for India's upcoming Rabi crop, which depends on irrigation for 55% to 57% of its acreage.
• Grain stocks and exports: While ample FCI buffer stocks will protect domestic food security and contain wheat and rice inflation for the next two to three years, a projected 15% to 20% drop in eastern regional rice output risks India's 46% global market share.
• Edible oil imports: Domestic vegetable oil output is projected to drop from 10 million to 8–8.5 million tonnes, which—alongside high crude prices and rupee depreciation—could drive soybean oil imports up to 7 million tonnes while palm oil imports drop to 7.5 million tonnes.
• Input cost inflation: Supply chains face rising operational pressures from higher diesel and packaging expenses, fertilizer prices that have escalated by 50% to 60%, and foreign exchange shortages among importing trading partners in Africa.