Food inflation rises to 7.6 per cent in August | The Financial Express

Food inflation rises to 7.6 per cent in August

Inflation in food and beverages rose to 7.57% in August, from 6.71% reported in July, because of a spike in prices of cereals, and some of the key vegetables and fruits.

Food inflation rises to 7.6 per cent in August
Food inflation was 7.56% in June and 7.84% in May.

Retail food inflation accelerated to 7.6% in August, from 6.7% in July, driven by a jump in the prices of cereals, vegetables, pulses and milk & milk products. This has pushed overall inflation measured by the consumer price index to 7% on year in August, from 6.71% in the previous month. Inflation in food and beverages rose to 7.57% in August, from 6.71% reported in July, because of a spike in prices of cereals, and some of the key vegetables and fruits.

Food inflation was 7.56% in June and 7.84% in May. A clutch of items like potato, tomato, lemon, wheat, banana, brinjal and milk saw sharp price increases in August. Inflation in potato and tomato rose by 40.32% and 16.51%, respectively, in August 2022; onion price inflation was down 18.48% on year. Brinjal prices rose by 14.67% in August 2022.

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 key tomato growing regions of Karnataka in the last few weeks, tomato crop production has been hit and prices are expected to be firm in the next four to six weeks, traders say.

Also read| Elevated inflation warrants appropriate policy response, says RBI article

Negative onion inflation in August 2022 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 9.57% in August, up from 6.9% in July, compared with 2.52% for pulses and (-) 4.57% for eggs. Wheat prices rose by 15.72% in August 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. Elevated inflation warrants appropriate policy response, says RBI article. Negative onion inflation in August 2022 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 9.57% in August, up from 6.9% in July, compared with 2.52% for pulses and (-) 4.57% for eggs. Wheat prices rose by 15.72% in August 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.

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Chicken prices witnessed negative inflation of 4.16% in August 2022 against 2.28% in July and 19.42% in June 2022, while the overall food inflation in the meat and fish category was 0.98%. Inflation in pulses category in August 2022 was a moderate 2.52%, while chana prices declined by 1.28%. Banana prices rose by 17.84% in August. Milk inflation in August was at 6.46%.

The edible oil and fat category saw inflation at 4.62% in August 2022, while it was 7.5% in July 2022, mostly contributed by sharp spikes in domestic prices of edible oil in the last one year. For mustard oil, inflation was only 0.79% in August 2022. Inflation in refined oil (sunflower, soybean and palm) was 7.53% because of a rise in global prices of edible oil, pushing up domestic prices.

However, global prices of edible oils such palm and soybean oil have declined by more than 30% in the last two months. Since May, the global price of palm oil had started to decline gradually after Indonesia, the biggest exporter of the item, removed a ban on shipments. India imports 56% of its edible oil requirements. Last month, edible oil manufacturers, including Adani Wilmar, Emami Agrotech and Ruchi Soya, had cut retail prices of edible oils.

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