Retail food inflation remained in the negative zone for the fourth consecutive month in September when it came in at (-) 2.28%, largely driven by subdued prices of vegetables, cereals, pulses, meat, eggs and spices. Food inflation was in the negative zone in August (-0.64%), July (-1.76%) and June (-1.01%).
The consumer food price index (CFPI) declined by 0.49% sequentially in September compared to August. In September last year, the food inflation rate was at 9.24%.
The inflation in the vegetable category was (-) 21.38% last month, compared to (-) 15.92% in August.
However, edible oil and fruit inflation remained high at 18.34% and 9.93 % respectively last month.
Madan Sabnavis, chief economist, Bank of Baroda said, “food inflation has been pushed down by vegetables and pulses which have registered negative growth of 21% and 15% respectively,”.
“Oils (edible) have high inflation of 18.4% as this has been pushed up by higher global prices and depreciating rupee,” Sabnavis said.
Inflation in mustard oil and refined oil were 20.97% and 20.2% respectively last month on year because of the rise in global prices. India imports about 58% of its edible oil consumption.
Overall cereal inflation in September eased further to 2.06% and had been in single digits for the past several months because of softening price rise in rice. Rice inflation last month was only 0.51% on year.
Inflation in wheat last month eased to 3.67% last month against a price rise of 4.3% in August.
Inflation in pulses declined by 15.32% last month for eight successive months on the prospects of robust kharif as well as rabi harvest and adequate carry forward stock held with the government, trade and other private entities.
Inflation in pulses was as high as 113% in August 2024.
The price rise in arhar continues to be in the negative zone since January, 2025 at – 29.95% last month because of a high base effect as fall in prices due to a record harvest as well as imports.
“Despite the early monsoon onset and abundant rains that supported kharif sowing (with acreage under kharif sowing already exceeding the normal area sown for the full season by early-September 2025), large excess rainfall and flooding in some parts of the country in late August 2025 and early-September 2025 is expected to have damaged standing crops,” Aditi Nayar, chief economist, ICRA, said.
Inflation in the meat and fish category came in at 2.15% last month. Chicken declined by 0.09% in September. Egg prices rose by a modest 2.76% last month on year.
Inflation in spices continues to decline since September last year and stood at 3.07% in September on year. Jeera prices declined by 14% on year.