Food price rise likely to have escalated in May

Crisil’s food plate cost tracker finds vegetarian meal costs surged 9% in May compared with 8% in April when official retail food inflation was 8.7%

Photo used for representation purpose only. | Photo Credit: Sushil Kumar Verma

India’s food inflation may have hardened further in May, as the average cost of a home-cooked vegetarian meal in India surged 9% compared with 8% in April to hit a four-month high. Tomato, onion, and potato prices surged around 40%, while the inflation in rice and pulses remained firm, as per Crisil’s monthly tracker of food costs.

Food inflation, as measured by the official retail price rise gauge — the Consumer Price Index (CPI), had surged to a four-month high of 8.7% in April from 8.5% in March, with rural consumers witnessing a sharper uptick of 8.75%. Overall retail inflation stood at 4.83% in April. The National Statistical Office will release the CPI numbers for May on June 12.

The cost of a non-vegetarian meal dropped 7% last month as broiler prices fell 16% from last May’s high levels, but still stood at the second-highest level in five months at ₹55.9. Vegetarian meals cost an average of ₹27.8 per person in May, up slightly from ₹27.4 in April, the Crisil Market Intelligence & Analytics’ Roti Rice Rate report reckoned.

There was a price rise of 39%, 41% and 43% in tomato, potato and onion, respectively. This signals a minor softening in tomato inflation which was 40% in April, while potato and onion prices rose faster than the 38% and 40% recorded in the previous month.

“Lower onion arrivals on account of a significant drop in rabi acreage cou­pled with a decline in potato arrivals on account of the adverse impact of late blight and crop damage in West Bengal contributed towards the in­crease in prices,” the Crisil report noted.

Prices for rice, which constitutes 13% of a vegetarian meal cost, and pulses, which account for another 9% of the cost, were up 13% and 21%, respectively, in May. Cumin, chilli and vegetable oil prices fell 37%, 25% and 8%, respectively, in May, offsetting the spikes in other components of a vegetarian meal.

Sequentially, the cost of a vegetarian food plate rose by 1% over April, largely owing to a 9% increase in potato prices, while the cost of other major components broadly remained flat, the report said.