El Niño Effect: Why India's Vegetable Oil, Pulses and Cotton Imports May Hit New Records

Meaning of El Niño: El Niño is the abnormal warming of sea surface waters in the central and eastern equatorial Pacific Ocean, off the coasts of Peru and Ecuador in South America. The name means "the little boy" or "Christ child" in Spanish, because Peruvian fishermen first noticed the unusually warm current appearing around Christmas.

Normal conditions in the Pacific: In a normal year, strong trade winds blow from east to west across the tropical Pacific. They push warm surface water towards the western Pacific (near Indonesia and Australia), while cold, nutrient-rich water rises (upwells) along the South American coast. This east-west circulation of air — rising over the warm western Pacific and sinking over the cooler eastern Pacific — is called the Walker Circulation.

What changes during El Niño: During El Niño, the trade winds weaken or even reverse. Warm water spreads towards the central and eastern Pacific, upwelling near Peru is suppressed, and the zone of rising air, cloud formation and heavy rainfall shifts eastwards away from Asia. This disturbs weather patterns across the world — bringing dry conditions to India, Southeast Asia and Australia, and floods to parts of South America.

El Niño as part of ENSO: El Niño is the warm phase of a larger coupled ocean-atmosphere cycle called the El Niño-Southern Oscillation (ENSO). Its opposite, cool phase is La Niña, which usually strengthens the Indian monsoon. The atmospheric component — the see-saw of surface pressure between the eastern Pacific (Tahiti) and the western Pacific (Darwin, Australia) — is called the Southern Oscillation and is measured by the Southern Oscillation Index (SOI).

How El Niño is measured: Scientists track sea surface temperature anomalies in the Niño 3.4 region of the central Pacific through the Oceanic Niño Index (ONI). El Niño conditions are generally declared when the anomaly is +0.5°C or more for a sustained period; stronger anomalies indicate "strong" or "very strong" events.

Weakening of monsoon circulation: The southwest monsoon is driven by the temperature and pressure contrast between the Asian landmass and the surrounding oceans. El Niño shifts the Walker Circulation eastwards, causing air to sink over the Indian region instead of rising. Sinking air suppresses cloud formation and rainfall, which weakens the monsoon.

Historical association with droughts: Most major Indian drought years — including 2002, 2009 and the back-to-back deficient years of 2014 and 2015 — coincided with El Niño events. However, the relationship is strong but not one-to-one: not every El Niño year produces a drought in India.

Role of the Indian Ocean Dipole (IOD): The Indian Ocean Dipole — a temperature difference between the western and eastern Indian Ocean — can modify El Niño's impact. A positive IOD (warmer western Indian Ocean near Africa) supports monsoon rainfall and can partly offset El Niño, as happened in 1997, when India received normal rains despite a very strong El Niño. When the IOD is neutral or negative, there is no such cushion.

Temperature effects beyond rainfall: El Niño does not only suppress rainfall; it also raises temperatures over India. This causes heat stress on crops, higher evaporation from soils and reservoirs, and warmer winters that can hurt the rabi season.

Share in annual rainfall: The southwest monsoon (June-September) delivers roughly 70-75% of India's annual rainfall. It waters the kharif crop directly, recharges groundwater, and fills reservoirs that irrigate the subsequent rabi (winter-spring) crop.

Dependence of rainfed agriculture: A little over half of India's net sown area is rainfed, without assured irrigation. Rainfed areas dominate the cultivation of pulses, oilseeds, coarse cereals (millets) and cotton — exactly the crops most exposed to a weak monsoon. Rice, wheat and sugarcane, by contrast, are largely grown with irrigation support.

Macroeconomic significance: Agriculture and allied activities engage the largest share of India's workforce and contribute a significant share of Gross Value Added. Food items carry a very high weight in India's Consumer Price Index, so a poor harvest quickly translates into food inflation, affecting monetary policy and household budgets.

Import and trade channel: When domestic output of edible oils, pulses or cotton falls, India must import more, widening the trade deficit and exposing consumers to global price volatility. Conversely, poor harvests can also force export restrictions on rice, sugar or wheat, which affect world markets because India is a leading producer.

Rainfall situation: June 2026 rainfall was 38% below the Long Period Average — an exceptionally weak start. July has been better, with a much smaller shortfall, and the monsoon revived in the first week of July. Even so, the cumulative all-India deficit for the season stood at 23.8% as on July 19. Rainfall has also been erratic and uneven — areas barely 20-25 km apart within the same taluka have had very different showers.

Crop-wise sowing decline: As on July 10, total kharif acreage was about 16% below the previous year. Pulses acreage was down 23.3% — with arhar (tur/pigeon pea) down about 30% and urad (black gram) down nearly 30%, and moong down about 11%. Oilseeds acreage fell 21%, ranging from about 16% in soyabean to roughly 34% in groundnut and 46% in sesamum. Cotton acreage was 15.3% lower, and coarse cereals were also down sharply.

Sowing windows still open: Sowing of pulses such as arhar, which is a 5-6 month duration crop, can continue till end-July. The cotton sowing window in central and southern India normally closes by mid-July but can stretch to the month-end in a delayed monsoon. Good rain over the next two weeks is therefore critical to recover lost acreage.

Pink bollworm risk in cotton: Experts point out that prolonged dry weather worsens pink bollworm (PBW) infestation in cotton. PBW is a monophagous pest — it feeds exclusively on cotton. Frequent rains disrupt the mating of adult moths and drown pupae in the soil, whereas long dry spells allow uninterrupted mating, egg-laying and growth of larvae that bore into developing bolls, cutting yields.

Structural edible oil deficit: India is the world's largest importer of vegetable oils. Domestic oilseed production (soyabean, mustard, groundnut, sunflower, sesamum) meets barely 40-45% of consumption; imports supply the remaining 55-60%. India imports palm oil mainly from Indonesia and Malaysia, soyabean oil from Argentina and Brazil, and sunflower oil from Ukraine and Russia.

Pulses gap despite being the largest producer: India is the world's largest producer, consumer and importer of pulses. Yet erratic monsoons and low yields in rainfed pulse belts create recurring shortfalls. Arhar is imported from East African countries — Mozambique, Tanzania, Malawi and Sudan — and Myanmar; masoor (red lentil) comes chiefly from Canada and Australia; yellow peas and chana come from countries such as Russia and Canada.

Cotton's reversal of fortune: India was for years among the world's largest cotton producers and a net exporter. Stagnant yields, shrinking acreage and pest pressure (especially pink bollworm resistance to Bt cotton) have turned India into a growing importer of raw cotton, with imports touching about 1.1 million tonnes in 2025-26 — the highest in the last decade — even as the textile industry's demand stays firm.

Biofuel link to edible oil prices: Vegetable oils today have an alternate use as biofuel feedstock. When crude petroleum prices harden, there is a greater incentive globally to divert palm, soyabean and rapeseed oil into fatty acid methyl esters (biodiesel), which substitute diesel. This diversion tightens edible oil supplies and firms up world prices — a key reason the FAO's vegetable oil price index has risen much faster than overall food prices.

Short and warm winter: NOAA expects the present El Niño to peak as a very strong event in October-December and persist into March-April. Since El Niño raises temperatures in addition to suppressing rain, India could face a relatively short and warm winter.

Crops at risk: Warm winters and depleted soil moisture threaten rabi crops — wheat, rapeseed-mustard, chana (chickpea), masoor and potato. Wheat is especially vulnerable to terminal heat during the grain-filling stage in February-March, which shrivels grains and cuts yields.

Reservoir and groundwater stress: A weak monsoon means poor reservoir replenishment and groundwater recharge, reducing the water available for rabi irrigation. Thus a prolonged El Niño can squeeze both of India's principal crop seasons in the same agricultural year.

Record foodgrain stocks: Public stocks of rice and wheat are several times the minimum buffer norms (detailed in Data Crunch below), giving the government ample firepower to run the Public Distribution System, undertake open market sales and cool cereal prices even if the kharif rice crop suffers.

Pulses buffer and import pipeline: Government agencies hold over 4 million tonnes of pulses that can be offloaded in a worst-case scenario. Fresh arhar shipments from East Africa are expected in August-September, and masoor from Canada and Australia becomes available after September and November respectively, with voyage times of only 20-30 days.

Comfortable global supplies: Unlike 2022, when Russia's invasion of Ukraine disrupted grain and edible oil trade, the world is currently awash with stocks from record 2025-26 global harvests of wheat, rice, corn (maize), sugar, soyabean, rapeseed and palm oil. The FAO Food Price Index was up only 1.7% year-on-year in June — with vegetable oils the lone commodity group showing a sharp rise.

Import duty cuts: The most likely first step is slashing import duties — currently an effective 16.5% on crude palm, soyabean and sunflower oil — along with continuing nil duty on imports of arhar, urad and raw cotton, so that imported supplies keep domestic prices in check.

Buffer stock releases: Releasing chana, arhar and other pulses from government buffers, and rice and wheat through open market operations, to moderate retail prices.

Recalibrating the ethanol programme: The government could go slow on the Ethanol Blended Petrol (EBP) programme by bringing back restrictions on diversion of sugarcane juice, syrup and intermediate-stage "B-heavy" molasses for ethanol, thereby protecting sugar availability if cane output falls.

Farm-level measures: Implementing district drought contingency plans (prepared by ICAR-CRIDA), promoting short-duration and drought-tolerant seed varieties for late sowing, ensuring timely crop insurance settlements under PMFBY, and advising farmers through Agromet services.

National Mission on Edible Oils – Oil Palm (NMEO-OP): Launched in 2021 with an outlay of about ₹11,040 crore to expand oil palm cultivation, with special focus on the North-Eastern states and the Andaman and Nicobar Islands, since oil palm gives far higher oil yield per hectare than traditional oilseeds.

National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds): Approved in October 2024 with an outlay of about ₹10,103 crore for 2024-25 to 2030-31, aiming to raise primary oilseed production substantially and increase domestic self-reliance in edible oils through better seeds, area expansion into rice-fallows, and value-chain support.

Mission for Aatmanirbharta in Pulses: Announced in the Union Budget 2025-26 as a six-year mission focused on tur (arhar), urad and masoor, with assured procurement of these pulses from farmers by NAFED and NCCF, to push self-sufficiency in the most import-dependent pulses.

Mission for Cotton Productivity: A five-year mission announced in the Union Budget 2025-26 to raise cotton productivity and sustainability and promote extra-long staple (ELS) cotton varieties, supporting the textile sector's raw material security.

MSP and PM-AASHA support: Minimum Support Prices are announced for 14 kharif crops (including arhar, moong, urad, groundnut, soyabean and cotton), and the PM-AASHA umbrella scheme provides price support procurement — together intended to make pulses and oilseeds remunerative and shift acreage towards them.

The immediate priority is close monitoring of the monsoon over the next two weeks, since the arhar and cotton sowing windows remain open till end-July and a sustained revival can still repair much of the acreage loss. The government should proactively use its record rice and wheat stocks and pulses buffers to anchor food inflation expectations, while calibrating import duties on edible oils and pulses in a timely, predictable manner rather than reacting after prices spike. District drought contingency plans, short-duration seed varieties, and prompt PMFBY insurance payouts must be activated in rainfall-deficient pockets. In the medium term, El Niño years underline India's structural vulnerability in rainfed pulses, oilseeds and cotton: accelerating NMEO-Oilseeds and NMEO-Oil Palm, assured procurement under the pulses self-reliance mission, expanding micro-irrigation and protective irrigation in rainfed belts, and investing in climate-resilient crop breeding are essential to break the cycle in which every weak monsoon translates into a record agricultural import bill. Finally, biofuel policy — both India's ethanol blending and the global diversion of vegetable oils to biodiesel — must be balanced carefully against food security in supply-stressed years.