Retail food inflation eased for the third consecutive month to a five-month low of 6.02% in January compared to 8.39% in December, as prices of vegetables declined with winter crop arriving in the markets.
The consumer food price index (CFPI) declined by 2.9% sequentially in January compared to December last year. In January last year, the food inflation rate was 8.3%.
Inflation in potato and onion prices rose by 49.61% and 16.35% respectively in January, 2025 on year. Tomato inflation declined by 7% on year last month, while August last year prices declined by 47% on year.
The inflation in the vegetable category was 11.35% last month, compared to a decline of 26.56% in December. However, edible oil inflation remained high at 15.64% last month.
“While the winter season has brought relief on the food side, vegetables and fruits inflation is still above 10%,” Madan Sabnavis, chief economist, Bank of Baroda, said. Sabnavis said “edible oils inflation has gone up and will be a worry given the high import intensity here,”. India imports about 58% of its edible oil consumption.
Inflation in pulses moderated further to 2.59% in last month from a high of 113% in August,2024 as prices have softened due to prospects of robust kharif harvest and imports.
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. However The gram split variety of pulses reported the highest price rise of 16.97% in January,2025. The price rise in arhar was in the negative zone (- 0.5%) last month because of a high base effect.
Overall cereal inflation in January was 6.24% and had been in single digits for the past several months because of softening of rice prices due to bumper harvest. Inflation in wheat last month was 8.8% on year.
The government is currently offloading around 2.5 million tonne (MT) of wheat in the open market from the surplus stock of the Food Corporation of India till March which is aimed at curbing future price rise. The wheat has been sown 31.97 million hectare, up 2.14% on year this rabi season.
Inflation in the meat and fish category was just 5.2% last month. Chicken prices rose by 7.5% last month. Price rise in milk last month was only 2.85% on year.
Inflation in spices continues to decline since September last year as it declined by 6.8% last month on year. Jeera prices declined by 32.25% on year.