India’s monsoon situation has improved significantly in recent months, easing concerns about widespread disruption to Kharif crops. However, rainfall distribution remains a key factor to watch, according to a report.

Global brokerage Macquarie said the cumulative rainfall deficit narrowed sharply to 12.6 per cent as of August 19, from 35 per cent in June.

“The situation is recovering, albeit not fully recovered,” it said. The improvement has also supported Kharif sowing, which has recovered considerably after a weak start to the season.

As of August 14, total Kharif sowing stood 2 per cent below last year’s level, compared with a 21 per cent shortfall in late June, according to the brokerage.

Rice acreage remained 3.7 per cent below last year’s level, while maize acreage declined 4 per cent.

In contrast, farmers brought pulses, oilseeds, sugarcane and cotton acreage to within around 1 per cent of year-ago levels.

Macquarie said the remaining sowing weakness remains concentrated in a few crops rather than across the broader Kharif season.

Healthy reservoir levels are also providing a buffer against the rainfall deficit. Reservoirs in Maharashtra and Gujarat hold storage at or above their 10-year averages. Key agricultural states, including Uttar Pradesh, Madhya Pradesh and Punjab, also maintain storage levels at around 80-100 per cent of their respective averages.

However, Bihar and parts of southern India require close monitoring.

The improving monsoon, limited shortfall in overall sowing and adequate irrigation reserves have collectively reduced downside risks to Kharif output, the report said.

The development also offers a positive signal for inflation, as food-supply pressures and inflation risks have moderated from June levels.