India’s fast-moving consumer goods sector is watching rural demand closely after the weak monsoon. The Nifty FMCG index fell to a 52-week low of 44,202 on October 1, down 0.7 per cent.

ITC, Hindustan Unilever, Godrej Consumer Products, Dabur and Tata Consumer Products all traded near 52-week lows, according to DataBiz Times. Poor consumer demand and rising raw material costs are hurting the sector.

A weak monsoon cuts farm incomes, since rural spending depends on agriculture. Nearly 313 districts received deficient or large-deficient rainfall this season, Grant Thornton’s Chirag Jain said. He expects weaker consumption growth for three to six months in deficit regions.

The impact shows first in discretionary spending, as rural households prioritize food, healthcare and education. NielsenIQ data showed 68 per cent of FMCG categories lost sales volumes in the April-June quarter.

Jain said a strong rabi crop could improve rural income prospects in the second half of the fiscal. Retail inflation was 4.82 per cent in August, with food inflation at 5.95 per cent.