Retail food inflation rose sharply to a three-month high of 9.24% in September, compared to 5.66% in August as prices of vegetables soared, and edible oils entered the inflation zone.
The consumer food price index (CFPI), rose by 1.17% sequentially in September compared to August. In September last year, the food inflation rate was 6.62%.
The jump in food and beverages inflation in September compared to August was largely led by vegetable inflation, which surged to a 14-month high of 36% in September from 10.7% in the previous month.
Inflation in onion and potato prices rose by 66% and 64.9% respectively in September. Tomato prices rose by 42% last month on account of base effect. Tomato prices declined sharply by 47% in August because high prices prevailed a year ago.
According to the agriculture ministry, output of potato and onion in the 2023-24 crop year (July-June) is projected at 56.76 million tonne (MT) and 21.23 MT, a decrease of 6% and 20% respectively.
Deflation in edible oils which had continued for the one year till August, 2024 turned the corner with inflation of 2.47% in cooking oils price in September due to hike in import duties. Inflation in mustard was 6.31% last month.
Inflation in pulses was 9.8% in September from 113% in August, 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.
The gram split variety of pulses reported the highest price rise of 21.2%. The price rise in arhar and urad were 11.44% and 9.4% respectively last month on year.
Overall cereal inflation in September was 6.84% in September from 7.31% in August – driven by decrease in rice and wheat prices. Inflation in wheat came in at 6.71% last month. Retail rice prices rose by 8.26% last month compared to 9.57% in August.
The government has commenced open market sale of rice to bulk buyers from the surplus stock of Food Corporation of India at the subsidized rate of Rs 28/kg. The government has also lifted restrictions on rice exports.
“The current rise is attributed to the increased prices of vegetables which went up 36% y-o-y. With a normal monsoon in the current year, we expect fresh supplies to hit the market in coming days and the food prices to moderate,”Sujan Hajra, chief economist , Anand Rathi shares and stock brokers.
Inflation in the meat and fish category was just 2.6% last month while price rise was 4.3% in August on year. Chicken prices declined by 3.1% last month. Price rise in milk last month was only 3% on year.
Inflation in spices declined by 6.1% last month on year. Jeera prices declined by 31.8% on year.