NEW DELHI: Retail food inflation rose marginally to 5.66% in August on an annual basis, compared to 5.42% in July, as prices of pulses, cereals and vegetables continued to be at elevated levels, and base turned less favourable than in July.
The consumer food price index (CFPI), however, declined by 0.44% sequentially in August compared to July. In July and August last year, the food inflation rates were 11.51% and 9.94%, respectively.
Stating that the main factor that worked on lowering the inflation rate was the base effect, Madan Sabnavis, chief economist, Bank of Baroda said :cereals, eggs, pulses, fruits, vegetables, had inflation above 6% each with pulses being 13.6%’. He also stated only with new crop arrivals the prices might move down.
Inflation in potatoes and onion were 64.03% and 54.04% respectively in August on year because of lower production. According to the agriculture ministry, output of potato and onion in the 2023-24 crop year (July-June) is projected at 56.76 million tonne (MT) and 21.23 MT, a decrease of 6% and 20% respectively.
Tomato prices declined 47.91% last month because high prices prevailed a year ago. Inflation in tomato in August 2023 was 179% on year when retail prices crossed Rs 100/kg across key cities because of disruption in supplies due to rains in hilly states. Deflation in edible oils continued in August, 2024.
Inflation in pulses rose to 113.6% in August, the highest in the food basket. Last month prices of pulses rose by 14.77% on year.
Retail inflation in pulses have been in double digits since June, 2023 because of lower output of key varieties of pulses like chana, tur and urad.
The gram split variety of pulses reported the highest price rise of 21.65%. The price rise in arhar and urad were 19.34% and 11.68% respectively last month on year.
Officials said that pulses prices are likely to decline because of robust kharif crops – tur, urad and moong sowing which currently at 12.62 million hectare, up 7% on year. Robust imports so far is likely to keep prices down.
Overall cereal inflation in July declined to 7.31% in August from 8.14% in July on year – driven by rise in rice and wheat prices. Inflation in wheat rose 6.61% last month. Retail rice prices rose by 9.52% last month compared to 10.89% in June.
The government has commenced open market sale of rice to bulk buyers from the surplus stock of Food Corporation of India at the subsidized rate of Rs 28/kg. The government has banned exports of white rice and imposed 20% export duties on par-boiled rice to improve domestic supplies
Inflation in the meat and fish category rose by just 4.3% last month while price rise was 5.97% in July on year. Chicken prices rose by only 2.02% last month. Price rise in milk last month was only 2.98% on year.
Inflation in spices declined by 4.4% last month on year. Jeera prices declined by 27.7% on year.
Source: The Financial Express
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