Retail food inflation turned negative at -1.06% in June, driven by subdued prices of vegetables, cereals, pulses and chicken. This marks eight consecutive months of decline in food inflation. It is for the first time in 76 months that negative food inflation was reported.
The deflation in food prices last month was also because of a high base.
Edible oil and fruit inflation remained elevated.
The consumer food price index (CFPI), however, rose 1.07% sequentially in June compared to May. In June last year, the food inflation rate was as high as 9.36%.
The inflation in the vegetable category was (-)19% last month, compared to (-) 12.74% in May. However, edible oil and fruit inflation remained high at 17.75% and 12.59% respectively last month.
“A majority of food items have recorded a lower Y-o-Y inflation in the month (until July 13) vis-à-vis June 2025. This is expected to lead to a further dip in the fruits and vegetables inflation print in July 2025, unless there is an unusual spike in vegetable prices in the latter part of the month,”Aditi Nayar, chief economist, ICRA. Nayar said while food prices have witnessed a seasonal sequential uptick in July 2025 so far, the extent of the same has been relatively benign compared to that seen in the year ago month, particularly in the case of vegetables.
Overall cereal inflation in June eased further to 3.73% and had been in single digits for the past several months because of softening of rice prices due to bumper harvest.
The food inflation rate for June 2025 is the lowest since February 2019, when it was reported at negative zone of 0.73%.
Inflation in wheat last month was 5.44% against a price rise of 6.43% in May on year. Inflation in mustard oil and refined oil were 18.28% and 23.55% respectively last month on year because of the rise in global prices. India imports about 58% of its edible oil consumption.
Inflation in pulses declined by 11.76% last month for five successive months on the prospects of robust kharif as well as rabi harvest. Inflation in pulses was as high as 113% in August,2024.
The price rise in arhar was in the negative zone (- 25.11%) last month because of a high base effect as fall in prices due to a record harvest after two years.
Inflation in the meat and fish category declined by 1.62% last month. Chicken declined by 9.96% in June. Egg prices rose by 2.57% last month on year.
Inflation in spices continues to decline since September last year as it declined by 3.03% last month on year. Jeera prices declined by 16% on year.