As retail food inflation remained above the headline print for the third straight month in May 2022 at 7.84%, a clutch of items like tomato, brinjal, potato, chicken, wheat and edible oil saw the sharpest price increases.
Food inflation in May saw a marginal decline from 8.1% reported in April; it was 7.47% in March.
However, vegetable inflation surged further in the month (18.3% versus 15.4% in April), as a heat wave hit supplies of crucial items like tomato, and brinjal and lemon.
Inflation for potato and tomato rose by 18.68% and 135.31%, respectively, in May 2022; onion price inflation was down 13.67% on year. Lemon price rose a steep 47% on year in May 2022.
Carbohydrates have been recording higher inflation than certain protein items since the past few months.
Inflation in cereals was 5.3% in May, compared with -0.4% for pulses and -4.6% for eggs.
“The outlook on inflation remains worrisome as weather shocks have come on top of high international commodity prices in raising supply-side pressure on the economy,” wrote DK Joshi, chief economist at Crisil. Trade sources said that the country’s potato output in the 2021-22 crop year (July-June) has declined to 53.6 million tonne (mt) from a record output of in 2020-21 of 56.1 mt.
Similarly, tomato output has declined to 20.30 million tonne in 2021-22 from a record 21.18 mt in the previous year.
Negative onion inflation in May 2022 was due to a bumper output of 31.12 million tonne in the 2021-22 crop year, against 26.64 mt in 2020-21.
Inflation in prices of vegetables such as brinjal and ladies’ fingers by 24.93 and 21.68%, respectively, in May 2022, pushing up overall inflation in the vegetables group.
Chicken prices rose by more than 18.55% in May 2022, while the overall food inflation in the meat and fish category was 8.23%. However, inflation in
fish and prawn prices witnessed a moderate increase of 2.3%.
Trade sources said demand for poultry meat has been rising steadily since the beginning of the year, while prices have risen because of a spike in feed as well as fuel cost.
The edible oil and fat category saw inflation at 13.26% in May 2022, mostly contributed by sharp spikes in domestic prices of edible oil in the last one year.
For mustard oil, inflation was 14.25% in May 2022, because of a more than 30% increase in retail prices of commodities in the last one year.
Inflation in refined oil (sunflower, soybean and palm) was 17.98% because of a rise in global prices of edible oil, pushing up domestic prices.
India imports about 55% of its annual edible oil consumption.
“Our food inflation basket is quite diverse and fluctuations in the agricultural commodities prices are mostly decided by production as well as global prices,” an official said.
Inflation in wheat was 9.59%, because of higher prices of commodities, due to decline in production compared to last year. In the case of the pulses and fruits sub-groups, inflation was (-) 0.42 % and 2.33%, respectively, in May 2022.
For gram (chana) split, which has share of close to 50% in the country’s pulses production, the inflation was (-) 0.88% in May 2022, while in the case of Arhar, inflation was at only (-) 3.84%.
Food and beverages have a 45.9% weightage in Consumer Price Index inflation calculation.
For inflation calculation, price data are collected from selected 1,114 urban markets and 1,181 villages across the country by the National Statistical Office of the ministry of statistics & programme implementation, on a weekly roster.
