Lower prices for tomatoes, chillis and LPG may have pulled food inflation down last month

Retail food inflation may have eased in September, thanks to cooling tomato prices and a reduction in LPG cylinder prices, even as onion prices rose further during the month, a CRISIL study on food plate costs suggested.

Retail inflation had eased to 6.83% in August from a 15-month high of 7.44% in July, but food price inflation stood at about 10%. Official consumer price trends for September will be released next week.

The cost of a vegetarian thali in September fell 1% year-on-year and 17% from August levels, while tomato prices declined around 62% from ₹102 per kilogram (kg) in August to ₹39 a kg.

The cost of a non-vegetarian thali declined at a slower pace of 9% from August due to a 2%-3% estimated increase in the price of broiler, which accounts for more than 50% share in the total thali cost, a monthly report from CRISIL Market Intelligence and Analytics noted. On a year-on-year basis, non-vegetarian thali costs were up 1%.

“Cost of fuel, which accounts for 14% and 8% of total cost of vegetarian and non-vegetarian thalis, respectively, declined about 18% on month in September as the cost of a 14.2kg LPG cylinder fell to ₹903 from ₹1,103,” the report said.

While onion prices rose about 12% between August and September and are expected to remain firm amid the expected lower output in Kharif 2023, CRISIL analysts said that a 31% decline in chilli prices over the previous month offered some comfort. Year-on-year inflation in spices had surged to 23.2% in August from 21.6% in July.