Retail food inflation eased to 4.79% in March 2023 from 5.95% in the previous month, thanks to a reversal in the trend of rising cereal prices and the downtrend in the the prices of most other food items, including prepared meals.The consumer food price index (CFPI) eased sharper than the headline index in March to 4.79% in March from 5.95% in February. The fall was also aided by a favourable base effect — CFPI was 7.68% in March, 2022.
Among food items, prices firmed up for “milk and products” and fruits in March, while inflation in vegetables and edible oil remained in the negative zone.
Inflation in the ‘food and beverage’ category declined to 5.11% in March 2023 from 6.26% in the previous month. Wheat prices rose by 19.91% in March 2023, a moderate decline from 25.37% in the previous month. Moderate decline in what prices are despite the government selling about 3.4 million tonne (MT) grain in the open market.
Wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined marginally to 107.7 MT because of heat waves 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 in April with the commencement of arrivals of new harvest in the mandis in the last three weeks.
Rice prices rose marginally by 11.51% in March 2023 against 11.22% 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 jeera (cumin seeds) and banana in March 2023 rose sharply by 39.92% and 21.77% respectively.
Global and domestic supply constraints have pushed up jeera prices sharply since the beginning of the year. Because of a robust production prospects inflation in vegetables in March, 2023 declined by 8.51%.
Inflation in potato (-19.59%), onion (- 30.87%), tomato (- 0.83%) and brinjal (-8.3%) 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 the 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 7.86% last month.
For mustard oil, prices declined by 14.65% in March 2023. Inflation in refined oil (sunflower, soybean and palm) also declined by 10.93% last month on year because of a decline in global prices of edible oil and bumper domestic output.
India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT. Chicken prices declined by 9.95% in March, 2023, while the overall food inflation in the meat and fish category declined by 1.42%.