Food inflation likely hardened further in June from the 8.7% mark recorded in April and May, going by Crisil’s food plate cost tracker, which showed that a home-cooked vegetarian meal’s cost rose 10% year-on-year to a six-month high, while non-vegetarian meal costs hit a seven-month peak.
The cost of a non-vegetarian meal was 4% lower than a year earlier, but inched up 4% sequentially to ₹58, the highest price since November. The average vegetarian meal cost had touched ₹29.4, the highest so far in 2024 and 6% over May levels, Crisil’s calculations show.
The monthly CRISIL Market Intelligence and Analytics report on food plate costs points to food inflation trends ahead of the official retail inflation data for June, due on July 12. In May, vegetarian food plate costs rose 9%, quickening from April’s 8%, while official food inflation for consumers was 8.7% in both the months.
TOP driven
A large part of the rise in June’s vegetarian meal costs was driven by a surge of 30%, 46% and 59% in prices of tomato, onion and potato (TOP), respectively. In May, the prices of these three key vegetables had risen 39%, 43% and 41%, respectively. On a month-on-month basis, prices of tomato, onion and potato rose 29%, 15% and 9%, respectively, due to lower arrivals. The calculation of a vegetarian thali’s cost also includes the prices of roti, rice, dal, curd, and salad.
“A dip in acreage, resulting in subdued arrivals, has led to a 13% on-year increase in the price of rice (accounting for 13% of the veg thali cost), while a dry spell in key kharif months impacted production of pulses, leading to a price increase of 22% on-year,” Crisil said. Prices of pulses had risen 21% in May, while rice prices were up 13%.
Sequentially, the cost of the non-vegetarian plate spiked 4% due to elevated vegetable prices, but a milder 1% increase in the cost of broiler, which accounts for about 50% of the cost, arrested a further increase. Compared with last June, broiler prices were down 14%, explaining the 4% year-on-year dip in non-vegetarian meal costs.
“TOP prices surged because of lower onion arrivals due to significant drop in rabi acreage, decline in yield for potato crop due to unseasonal rains in March, and virus infestation in tomato summer crop due to high temperatures in key growing regions of Karnataka and Andhra Pradesh that tanked tomato arrivals down 35% on-year,” the report noted, adding that base effects played a part too.
