NEW DELHI: As kharif crop harvesting gather pace, retail prices of key agricultural commodities including rice, sugar, mustard oil and onion are ruling at significantly higher levels compared to the previous year, according to the Price Monitoring Cell of the Department of Consumer Affairs.
Experts attribute the market behavior to prospects of a decline in kharif production because of deficient monsoon impacted by El Nino, and elevated global prices of most items. The high prices threaten to stoke food inflation further in the coming months.
Food inflation as per the consumer food price index moved sharply upwards to touch 7.74% in September, primarily because onion, ginger, garlic, sugar, chicken, and edible oils became far costlier.
On the harvesting of crops which is currently being undertaken, Pushan Sharma, Director, Crisil Intelligence, said the outlook this season is mixed, with weather-related variability emerging as the key factor to watch.
“For field crops, acreage is expected to be lower by around 2-3% year-on-year, while yields could decline by about 5-6%,” Sharma told FE. Kharif crops – paddy, pulse, oilseeds and cotton – area according to agriculture ministry, declined marginally to 110.7 million hectare (Mha) on year, while crops were impacted by erratic and deficient monsoon rains.
Average retail onion prices rose to Rs 53.42/kg on Saturday, up 100% from a year earlier. Retail prices have risen in the last couple of months because of a fall in output, while prices in Delhi-NCR have crossed Rs 65/kg.
To curb the price rise, the government has started to offload onions at the subsidized rate of Rs 35/kg from its buffer, while sources said that prices are likely to rise another few weeks until the arrival of the kharif harvest. “Food inflation is surging and is already at 7.7% p (in September). With the El Nino impact becoming visible, it is time to take action. Either release more stocks in the open market or allow more imports of sugar, pulses and oilseeds at low duty,” Ashok Gulati, agricultural economist, told FE.
Retail prices of mustard oils increased to Rs 208.18/kg on Saturday, a 11% increase over the previous year respectively. Sugar prices saw a sharp spike in August because of a decline in production during the 2025-26 season (October–September) and the government announced raw sugar imports of 1 million tonne (MT).
Prices of rice increased to Rs 48.38/kg on Saturday, a 12% increase over the previous year as prospects of lower non-Basmati variants output especially in the southern regions. Retail inflation in rice in September was 8.25% compared to 5.89% in August, 2026.
An official said the government currently holds over 37 million tonnes (MT) of rice stock against a buffer requirement of 10.25 MT for October 1; this stock would be offloaded under the open market sale scheme to curb the price rise.
Retail prices of chana (gram) dal, which accounts for 50% of country’s pulse production, as of Sunday witnessed 8% year-on-year increase despite robust buffers and imports of yellow peas. Wheat prices have increased only by over 2% year-on-year to R 32.49/kg. FCI currently holds 45.4 MT of wheat stock against a buffer of 20.5 MT for October 1.
Sharma of Crisil said within field crops, paddy, maize, tur, cotton and groundnut warrant closer monitoring, given the expected pressure on yields. “Paddy has faced weather-related stress in key growing regions, while maize, pulses, oilseeds and cotton could see lower output conditions accompanied by relatively firm prices,” Sharma said.
Meanwhile, sowing of rabi or winter crops – wheat, pulses, oilseeds and coarse cereals – has commenced on a sluggish note, with area covered till October 30, 2026, was 3.75 million hectare (Mha), a 46% decline on year.
The total winter crop sown areas was 64.76 Mha last year, according to the agriculture ministry. The sowing is expected to pick up pace by the middle of the month as wheat, a major rabi crop, would be sown across key producing states including Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh.
Source: The Financial Express
