In May 2024, retail food inflation held steady at 8.69% year-on-year, a slight dip from April’s 8.7%, according to the latest data.
The persistent high prices of vegetables, pulses, and cereals were key contributors to this inflation rate.
However, the Consumer Food Price Index (CFPI) recorded a sequential decline of 0.73% for the month. This compares to a significantly lower food inflation rate of 4.31% year-on-year in May 2023.
Deflation in edible oils persisted in May 2024. Vegetable inflation remained high at 27.33%, though slightly lower than April’s 27.8%. Notably, retail potato prices surged by 55.43% last month, up from 53% in April, due to anticipated drops in output. Potato prices had been in a negative zone from February 2023 to January 2024.
“The present heatwave has taken a toll on vegetable supplies, with prices of potatoes, tomatoes, and onions rising. This trend is likely to continue for another month or two,” said Madan Sabnavis, Chief Economist at Bank of Baroda. The agriculture ministry projects the 2023-24 crop year (July-June) output of potato and onion at 56.76 million tonnes (MT) and 21.23 MT respectively, marking a decrease of 6% and 20%.
Pulses and products experienced an inflation increase to 17.14% in May from 16.84% in April, with the arhar variety seeing the highest rise at 32.1%. Lentils (masur) prices remained in the negative zone in April due to higher imports.
Cereal inflation in May rose to 8.69% from 8.63% in April, driven largely by increasing rice prices. Wheat inflation increased to 6.53% last month from 6.02% in April, while retail rice prices rose by 12.28%, slightly lower than in April.
Inflation in spices continued to ease, dropping to 4.27% in May from 7.75% in April. This marks a significant decline, especially in jeera (cumin) prices, which fell to 9.08% in May from a peak of 122% in November 2023.
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