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Food inflation plunges to 21-month low at 3.75 pc in Feb

Food inflation in India declined for the fourth consecutive month, reaching a 21-month low of 3.75 pc in February, compared to 5.97 pc in January. The drop was primarily driven by lower prices of vegetables, pulses, and spices, as the winter harvest boosted market supplies.

News Arena Network - New Delhi - UPDATED: March 12, 2025, 08:55 PM - 2 min read

Retail food inflation eases for fourth straight month.


Food inflation in India declined for the fourth consecutive month, reaching a 21-month low of 3.75 pc in February, compared to 5.97 pc in January. The drop was primarily driven by lower prices of vegetables, pulses, and spices, as the winter harvest boosted market supplies.

 

The Consumer Food Price Index (CFPI) recorded a 2 pc decline compared to January. In contrast, food inflation was 8.66 pc in February last year and 2.96 pc in May 2023.

 

However, economists cautioned that higher-than-normal temperatures could impact the rabi crop harvest and lead to a rise in food prices in the coming months.

 

Inflation in onion and potato prices surged by 30.42 pc and 26.36 pc year-on-year in February 2025. However, tomato prices dropped significantly, recording a 28 pc decline on an annual basis, following a 7 pc drop in January.

 

The overall inflation in the vegetable category fell by 1.07 pc last month, compared to 11.35 pc in January.

 

Cereal inflation stood at 6.1 pc in February and remained in single digits for the past several months due to a bumper rice harvest, which helped stabilise prices. However, wheat prices rose by 9.17 pc year-on-year in February.

 

Madan Sabnavis, Chief Economist at the Bank of Baroda, attributed the decline in inflation to a sharp drop in vegetable, pulse, and spice prices, aided by the base effect. However, he noted concerns over fruit and edible oil prices, which were affected by currency fluctuations that increased import costs.

 

Inflation in mustard oil and refined oil stood at 19.48 pc and 22.23 pc, respectively, last month. India imports nearly 58 pc of its edible oil consumption, making prices vulnerable to global trends.

 

The decline in pulse prices also contributed to the overall reduction in inflation. Inflation in pulses was recorded at -0.35 pc in February, down from 2.59 pc in January, reflecting expectations of a strong rabi and kharif harvest.

 

This marks a significant shift from August 2024, when pulse inflation peaked at 113 pc.

 

Despite the general decline, some pulse varieties continued to see price increases. Inflation in gram split pulses stood at 13.8 pc last month, compared to 16.97 pc in January. However, arhar prices saw a 5.85 pc decline, attributed to the high base effect.

 

The government has taken steps to stabilise food prices, including releasing close to 3 million tonnes of wheat from Food Corporation of India (FCI) stocks in the open market. This move aims to curb further price rises in essential food items.

 

Meat and fish inflation remained subdued at 2.11 pc in February. Prices of chicken and eggs declined by 1.86 pc and 3.01 pc, respectively, while milk prices recorded a modest annual rise of 2.68 pc.

 

Inflation in spices has been on a downward trend since September 2024, dropping by 5.8 pc last month. Notably, jeera prices saw a sharp decline of 28.77 pc year-on-year.

 

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