According to an analysis conducted by the ratings agency Crisil, the price of a typical household thali saw a slight decrease in August compared to the previous month, primarily influenced by a strong comparative base. However, it remained notably higher when compared to the same period last year for the second time in this fiscal year, mainly due to the elevated prices of tomatoes.
The agency’s Roti Rice rate, a crucial indicator for assessing food price inflation, indicated that the price of a vegetarian thali increased by 24% year-on-year, while a non-vegetarian thali experienced a 13% year-on-year rise in cost for the month.
“Of the 24% rise in the vegetarian thali cost, 21% can be attributed solely to the price of tomato, which rose 176% on-year to INR 102 per kg in the month compared with INR 37 per kg a year ago,” according to the agency.
According to the analysis, onion prices surged by 8%, chillies by 20%, and cumin by a staggering 158% compared to the previous year. These price increases contributed to approximately a 1% overall rise in the cost of a vegetarian thali. A vegetarian thali typically includes items such as roti, vegetables (onion, tomato, and potato), rice, dal, curd, and salad. In the case of a non-vegetarian thali, all dishes are the same except for the substitution of dal with chicken. The estimate for broiler prices in August 2023 is forthcoming.
The analysis revealed that the cost increase for a non-vegetarian thali was more moderate, primarily because the price of broilers, which constitute over 50% of the total cost, is estimated to have increased by a relatively modest 1-3% year-on-year.
The report highlighted that a 17% year-on-year reduction in vegetable oil prices and a 14% decrease in potato prices partially mitigated the overall cost of both types of thalis.
Costs may experience a reduction in September due to certain factors, such as the retail prices of tomatoes declining by 50% month-on-month to INR 51 per kg. Additionally, the cost of a 14.2 kg cooking gas cylinder, which was priced at INR 1,103 in August, has been reduced to INR 903 in September.
“This will also come as a relief for consumers,” according to the agency.
Persistent price pressures have resulted in elevated retail prices. The most recent data for July indicated that retail inflation, as measured by the consumer price index, surged from 4.9% in June to 7.4%. This increase was primarily driven by soaring prices of vegetables and cereals, sparking concerns about the overall price situation.
RBI Governor Shaktikanta Das cautioned on Tuesday that frequent occurrences of recurrent food price shocks pose a risk to the stability of inflation expectations. These expectations have been gradually anchoring since September 2022, and the central bank will maintain a vigilant stance in monitoring this situation.