Food inflation rises sharply to 8.6% in September | The Financial Express

Food inflation rises sharply to 8.6% in September

Prices of key cereals and vegetables to remain firm in the short term

Food inflation rises sharply to 8.6% in September
According to traders, the food prices may inch up further in the next couple of months, given the damage to the kharif paddy crop and decline in wheat output in the last rabi season which led to a fall in stocks.

Retail food inflation rose sharply to 8.6% in September, from 7.6% in August, mostly driven by a jump in the prices of cereals and vegetables. This has pushed overall inflation measured by the consumer price index to 7.4% on year in September, from 7% in the previous month.

Inflation in “food and beverages” rose to 8.4% in September, from 7.5% reported in August, because of a spike in prices of cereals, and some of the key vegetables and fruits.

According to traders, the food prices may inch up further in the next couple of months, given the damage to the kharif paddy crop and decline in wheat output in the last rabi season which led to a fall in stocks.

A clutch of items like potato, tomato, lemon, wheat, rice, banana and brinjal saw sharp price increases in September.

Inflation in potato and tomato rose by 42.9% and 53.5%, respectively, in September 2022; onion price inflation was down 15.5% on year. Brinjal prices rose by 15.5% in September 2022.

Also Read: Retail inflation hits 5-month high in September 

The country’s potato output in the 2021-22 crop year (July-June) has declined to 53.6 million tonne (mt) from a record output of 56.1 mt in 2020-21. Similarly, tomato output has declined to 20.30 mt in 2021-22 from a record 21.18 mt in the previous year.

“Due to heavy rains in the last two weeks in the key tomato growing regions of Karnataka and Maharashtra, tomato crop production has been hit and prices are expected to be firm in the next four to six weeks”, Budhuraja, an tomato trader in Azadpur mandi (Delhi), one of the biggest markets for vegetables and fruits told FE.

Lemon and banana inflation was 25.5% and 16.4% respectively last month.

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

Inflation in cereals was 11.5% in September, up from 9.57% in August, compared with 3.5% for pulses and (-) 1.7% for eggs.

Wheat prices rose by 17.4% in September 2022.Wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined by around 3% on year to 106.8 mt because of heat waves during the flowering stage of the crop in March.

In May, 2022, India banned wheat exports for ensuring domestic supplies.

Rice price also increased by 9.2% in September, 2022 while prices rose by 6.9% in the previous month.

India’s rice production 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. This is because of lower paddy sowing because of deficient rainfall in key growing states of Uttar Pradesh, West Bengal, Bihar and Jharkhand.

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.

Chicken prices witnessed a moderate increase on 0.1% in September, 2022, while the overall food inflation in the meat and fish category was 2.5%.

Inflation in pulses category in September 2022 was a moderate 3%, while chana prices declined by 1.7%. Milk inflation in August was at 7.1%.

The edible oil and fat category saw inflation at 0.3% in September 2022, because of fall in edible oil prices. For mustard oil, inflation was in negative zone 9-) 5.5% in September 2022.

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First published on: 13-10-2022 at 05:05:00 am
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