Retail food inflation eased a tad to 5.95% in February 2023 from 6% in the previous month, as a rise in prices of cereals, milk and bananas were offset by declines in prices of vegetables and edible oils. In the year ago month, the consumer food price inflation was recorded at 5.85%.
Inflation in the ‘food and beverage’ category rose to 6.26% in February 2023 from 6.19% in the previous month. Inflation in cereals, milk and fruits categories rose by 16.73%, 9.62% and 6.38% respectively in February this year. Wheat prices rose by 25.37% in February on year.
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 million tonne (MT) because of heat wave during the flowering stage of the crop in March last year. However, trade sources pegged the production of wheat in the range of 96 – 100 MT last year.
Officials said that wheat inflation would likely decline from March with the Food Corporation of India is selling 2.8 MT of wheat in the open market so far which has pulled down the prices significantly.
Rice prices rose by 11.22% in February 2023 from 10.44% in the previous month.
Rice production in the 2022-23 crop year (July-June) is estimated at a record 130.8 MT which is 1.36 MT higher than the previous crop year.
Inflation in banana and milk in February 2023 rose by 18.68% and 9.62% respectively.
Because of a robust production prospects inflation in vegetables in February, 2023 declined by 11.61%.
Inflation in potato (-7.36%), onion (- 19.14%), tomato (- 36.2%) and brinjal (- 19.06%) declined sharply last month.
The estimated production of onion during the 2022-23 crop year (July-June) is around 31.8 MT against 31.7 MT reported in the previous year. The output of kitchen bulbs was 26.64 MT in 2020-21.
Although the country’s potato output in the 2021-22 crop year (July-June) has declined to 53.6 MT from a record output of 56.1 MT in 2020-21, there is a prospect of the record harvest in current crop year (2022-23).
Tomato prices fell last month as supplies have improved from the key producing states of Madhya Pradesh, Andhra Pradesh and Karnataka.
Inflation in oil and fats categories declined by 0.49% last month.
For mustard oil, prices declined by 9.8% in February 2023. Inflation in refined oil (sunflower, soybean and palm) was at 2.3% because of a decline in global prices of edible oil.
India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT.