The retail food inflation rate decreased slightly to 8.52% in March 2024 from 8.66% the previous month because of a high base and a sequential decline in the prices of spices, edible oils, and legumes. But month by month, the cost of staples like cereal, milk, meat, and veggies increased.
The relevant consumer food price index (CFPI) showed a 0.16% sequential increase in the previous month. Food inflation for the year ended in March 2023 was 4.73%.
In February 2024, prices of vegetables increased by 30.25% year over year, whereas in March, there was an inflation of 28.34%. The retail price of potatoes increased by 41% annually last month, compared to a 12.38% increase in February 2024. The rate of inflation for potatoes stayed negative from February 2023 to January 2024.
In February 2024, the price of onions increased by 21.87% year over year, although retail inflation increased to 36.88% last month. On the other hand, tomato prices increased by 32.52% last month compared to a 41.83% increase in February 2024.
Prices for milk and related goods increased by 3.38% last month compared to a little decrease of 3.86% in February 2024. Pulses saw a little decrease in inflation to 17.71% in March 2024 from 18.9% in February 2024, while the arhar variant of pulses saw a 33.54% price increase.
Aditi Nayar, chief economist at ICRA, stated that although she expects food and beverage inflation to stay above 7% in April 2024, a worsening of the impending heatwave could exacerbate the seasonal increase in perishables’ prices, making a favorable monsoon in 2024 even more crucial to containing food inflation.
Due to an increase in wheat prices, the overall inflation rate for cereals increased to 8.37% last month from 7.6% year over year in February 2024.
Wheat inflation increased to 4.74% last month, however price increases were only 2% in February 2024 compared to 12% in July 2023 due to improved supply as a result of the Food Corporation of India’s open market sales. During this fiscal year, the company has sold a record 9.6 MT of wheat through weekly e-auction sales on the open market.
Last month, retail rice prices increased by 12.69%, somewhat more than the previous month. In an effort to increase domestic supply, the government has outlawed the export of white rice and placed 20% export taxes on parboiled rice.
Meat and seafood inflation increased by 6.36% last month, compared to a 5.24% year-over-year increase in prices in February 2024. Higher feed costs caused chicken prices to rise by 8.53% last month, compared to a 5.69% year-over-year increase in February 2024.
While the overall inflation in the oils and fats category fell by 11.71% last month, the prices of refined oil and mustard oil fell precipitously by 17.96% and 15.12%, respectively, year over year.
The category of “spices” saw 11.4% annual inflation last month, down from 13.51% in February 2024. Prices for jeera (cumin seeds) increased by 50% last month and by 89.83% year over year in January 2024. Experts predict that when strong crops arrive, jeera inflation would drop much more.
Also read | CPI inflation dips to 4.85% low in March, a 10-month low
