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Can El Nino derail the rural recovery and hit FMCG firms?

International meteorology experts have warned of the El Nino Effect on India's monsoon which could lead to intense heat waves and a monsoon deficit in 2023.

Monsoon is crucial for the Indian economy, providing 70% of annual rainfall as well as necessary water for agriculture and industry.

An El Nino year could derail the rural recovery, hit the consumer goods sector, and give rise to food-based inflation.

FMCG companies rely heavily on the rural market which makes up around 36% of their sales pie.

There is a 50% probability of having an El Niño this year.

El Niño could be a double-whammy of high rural inflation and a rainfall deficit, impacting the recovery prospects of FMCG companies.

FMCG companies are trying to boost mass discretionary spend by passing on the recent benefits of receding cost side pressures.

El Niño conditions, if they happen, remain a key monitorable ahead and could be a roadblock to the rural recovery.

A good monsoon is essential for India's economy, as almost half of the country’s farmers depend on rain-fed irrigation. 

It is too early to be concerned about the impact of El Niño on FMCG companies and the Indian economy.

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El Nino is a climate pattern that explains the warming up of ocean temperatures over the tropical eastern Pacific. It is usually accompanied by intense climate changes and causes rainfall deficits in countries like India.

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Can El Nino derail the rural recovery and hit FMCG firms?

El Nino is a climate pattern that explains the warming up of ocean temperatures over the tropical eastern Pacific. It is usually accompanied by intense climate changes and causes rainfall deficits in countries like India.

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