Retail food inflation eased slightly to 8.52% in March 2024 from 8.66% in the previous month, driven by a sequential decline in the prices of pulses, edible oils, and spices, alongside a high base effect. Conversely, key items such as cereals, milk, meat, and vegetables witnessed an uptick in prices on a month-on-month basis.
The consumer food price index (CFPI) for the previous month showed a modest sequential increase of 0.16%. In March 2023, the annual food inflation stood at 4.73%.
Vegetable inflation reached 28.34% in March, marking a decrease from the 30.25% recorded in February 2024. Meanwhile, annual retail price growth for potatoes surged to 41% last month, a significant rise from the 12.38% seen in February 2024. Notably, potato inflation had remained negative between February 2023 and January 2024.
Last month, retail onion inflation surged to 36.88%, up from the 21.87% increase recorded in February 2024. Conversely, tomato prices saw a slight decrease in their year-on-year growth, rising by 32.52% last month compared to the 41.83% rise in February 2024.
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Milk and dairy product prices saw a 3.38% increase last month compared to the previous year, reflecting a marginal decrease from the 3.86% rise in February 2024. Additionally, pulse inflation witnessed a slight decline to 17.71% in March from 18.9% in February 2024, while the arhar variety experienced a notable price increase of 33.54%.
Aditi Nayar, Chief Economist at ICRA, anticipates that food and beverages inflation will continue to exceed the 7% threshold in April 2024. She highlighted concerns about the potential exacerbation of the seasonal rise in perishable prices due to an impending heatwave, underscoring the importance of a favorable monsoon in 2024 to mitigate food inflation pressures.
The overall inflation in cereals increased to 8.37% last month from 7.6% in February 2024, primarily driven by the rise in wheat prices.
Wheat inflation climbed to 4.74% last month, compared to a mere 2% increase in February 2024 and a substantial 12% surge in July 2023. This shift can be attributed to improved supplies, facilitated by the open market sales conducted by the Food Corporation of India. Notably, the corporation has achieved a significant milestone, selling a record 9.6 million metric tons of wheat through weekly e-auctions this fiscal year.
Retail rice prices increased by 12.69% last month, a slight uptick from the previous month. To enhance domestic supplies, the government has implemented measures such as prohibiting exports of white rice and imposing a 20% export duty on par-boiled rice.
Last month, inflation in the meat and fish category increased by 6.36%, slightly higher than the 5.24% rise recorded in February 2024. Specifically, chicken prices surged by 8.53% due to elevated feed costs, compared to a 5.69% increase in February 2024.
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Mustard oil and refined oil prices experienced sharp declines of 15.12% and 17.96% respectively last month compared to the previous year, resulting in an overall decrease of 11.71% in the inflation rate within the oils and fats category.
Inflation in the ‘spices’ category last month stood at 11.4% year-on-year, marking a decrease from 13.51% in February 2024. Jeera (cumin seeds) prices saw a 50% increase last month, following an 89.83% rise in January 2024 compared to the previous year. Experts anticipate a further decline in jeera inflation with the arrival of robust crops.
