Eating out or even cooking at home in India has become an expensive affair. Since November 2023, the food inflation rate has stubbornly stayed above 8%. Over the year, it has nearly tripled. From 2.91% in May 2023 to 8.69% in May 2024, the hike is distressing.
The Consumer Food Price Index (CFPI) gauges how much more expensive or cheaper food items have become. In May 2024, the CFPI was at 8.69%. This means you're now paying 8.69% more for the same groceries than a year ago.
Consider this: If you spent 177.2 rupees on groceries last year, you're now shelling out 192.6 rupees for the same quantity.
But why is food becoming costlier?
Several reasons contribute to this uptrend. According to news agencies, bans on food exports and reduced tariffs on imports haven’t offered much respite.
Last year, many areas faced drought, and this year, scorching heat has ravaged most states, critically lowering the supply of legumes, vegetables, and grains.
While it's quite common for vegetable supplies to dwindle during the summer, the deficit is particularly severe this year due to record-high temperatures across most parts of the country, 4 to 9 degrees Celsius above average.
The relentless heat not only spoiled the vegetables but also hindered the sowing of crops like onions, tomatoes, eggplants, and spinach. Farmers usually begin sowing vegetables before the monsoon season, but this year, the intense heat wave has disrupted this process, further exacerbating vegetable shortages.
Over the past year, vegetables and legumes have seen the steepest price increases. Vegetable inflation rates stood at 27.33% and legume rates at 17.14% in May. Last year, what you could have bought for 161 rupees in vegetables, now requires you to fork out 205 rupees.
Source: aajtak
Will the monsoon offer any respite?
The monsoon season in India is between June and September. Known as the South West Monsoon, almost 75% of the country's annual rainfall requirement is met during this time.
This year, the monsoon arrived early but has yet to reach most parts of the country. It is still dry in the majority of areas, which could delay crop sowing. Although the monsoon was weak in June, the weather department predicts more rainfall than usual for the remainder of the season.
If the monsoon turns out well, we might see a decline in vegetable prices by August. However, if there are good rains in July and August leading to flooding, it could impact the production cycle adversely.
However, don't expect immediate relief. News agencies report that the supply chain disruption means prices of milk, grains, and legumes won't fall soon. Wheat supplies are affected, and the government is yet to announce plans for imports, so wheat prices are likely to escalate further.
Rice prices aren't expected to decrease either because the government recently increased its minimum support price (MSP) by 5.4%. Just last week, the MSP for rice was upped from 2,183 to 2,300 rupees.
The supply of legumes like pigeon pea was severely hit by last year's drought, and recovery isn't anticipated until the new season's harvest rolls around. Sugar prices may also stay high due to reduced sowing, signaling lower production in the coming season.
Source: aajtak
How much pricier is food getting?
The rating agency CRISIL releases a report monthly on the prices of veg and non-veg thalis. The reports indicate that while the cost for veg thalis is on the rise, non-veg thalis are getting cheaper.
The CRISIL report shows that the average cost of a veg thali has risen to 27.8 rupees in May, up from 27.4 rupees in April. In a year, the price of a veg thali has increased by 9%.
Conversely, the average cost of a non-veg thali has decreased by 7% over the year. In May, the non-veg thali averaged 55.9 rupees, down from 59.9 rupees in May 2023.
CRISIL's veg thali includes staples like roti, vegetable dishes (with onions, tomatoes, and potatoes), rice, dal, curd, and salad. On the other hand, chicken replaces dal in the non-veg thali.
The uptick in veg thali prices is primarily due to vegetables. In one year, tomatoes have seen a 39% increase, potatoes 41%, and onions 43%. As for non-veg thalis getting cheaper, the main reason is the decreased pricing of broiler chicken, which has fallen by 16% in a year.
The rising costs mean that most people can't afford decent meals. According to a United Nations report, 70% of Indians do not have access to a healthy diet. The report states that if an individual in India consumed a healthy diet for a day, it would cost over 2.9 dollars or 240 rupees. This translates to more than 7,000 rupees a month for a healthy diet per person.
