Food inflation falls sharply in October | The Financial Express

Food inflation falls sharply in October

India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT.

Food inflation falls sharply in October
Inflation in cereals was 13.79% in December up from 12.96% in November, compared with 3.89% for pulses and (-) 15.08% for vegetables.

Retail food inflation declined to 7.01% in October, from 8.6% in September, mostly driven by decline in prices of edible oils, meat products, pulses and onions. Inflation in the “food and beverages” category also declined to 7.04% in October from 8.4% in September.

According to traders, the food prices could soften further with the onset of winter months which would give a boost to the harvesting of fruits and vegetables. However, a clutch of items like potato, tomato, wheat, rice, bananas and milk products saw sharp price increases in October.

Inflation in potato and tomato rose 43.06% and 13.89%, respectively, in October; onion price inflation was down 20.5% on year. The country’s potato output in the 2021-22 crop year (July-June) declined to 53.6 million tonne (MT) from a record 56.1 MT in 2020-21. Similarly, tomato output declined to 20.30 MT in 2021-22 from a record 21.18 MT in the previous year.

Potato prices are expected to cool down by December when new harvest enters the market, according to Budhiraja, a trader in Azadpur mandi (Delhi), one of the biggest markets for vegetables and fruits.

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Negative onion inflation last month was due to a bumper output of 31.12 MT in the 2021-22 crop year against 26.64 MT in 2020-21.

Inflation in cereals was 12.08% in October, up from 11.55% in September, compared with 2.78% for pulses and (-) 0.18% for eggs.

Wheat prices rose 17.6% in October 2022. Wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined around 3% on year to 106.8 MT because of heat waves during the flowering stage of the crop in March. In May, India banned wheat exports for ensuring domestic supplies.

Rice price also increased 10.2% in October while prices rose 9.2% in the previous month.

India’s rice output in the current kharif season for the 2022-23 crop year (July-June) is expected to decline by around 6% to 104.99 MT against 111.76 MT in 2021-22, according to the first advance estimate of foodgrain production released by the agriculture ministry recently.

The government also banned broken rice exports as well as put additional export duties of 20% on the certain varieties of non-basmati rice exports. Banana prices rose by 13.07% in October, 2022.

The edible oil and fat category saw a negative inflation at 2.15% in October, mostly contributed by decline in domestic prices of edible oil since May. For mustard oil, prices declined 9.95% in October. Inflation in refined oil (sunflower, soybean and palm) was a marginal 0.74% because of a decline in global prices of edible oil.

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India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT.

Chicken prices witnessed a moderate increase of 2.73% in October, 2022, while the overall food inflation in the meat and fish category was 3.08%.

Inflation in pulses category in October was a moderate 2.78%, while chana prices declined 2.3%. Milk inflation was at 7.69%.

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First published on: 15-11-2022 at 03:45 IST