According to a CRISIL report, the surge in onion and tomato prices resulted in a 10% increase in the cost of vegetarian thalis and a 5% rise in non-vegetarian thalis in November compared to the previous month.
In November 2023, the cost of a vegetarian thali rose by 9% compared to the same period the previous year. Additionally, the prices of pulses, constituting approximately 9% of the total cost of the vegetarian thali, witnessed a year-on-year increase of 21%.
The report indicated that in November, the prices of onions and tomatoes saw a surge of 58% and 35%, respectively, compared to October. This increase was attributed to festive demand and reduced output during the Kharif season due to unpredictable rainfall conditions.
Prices of broiler chicken, constituting approximately half of the cost of a non-vegetarian thali, experienced a 1-3% decrease.
The substantial increase in prices of essential food items such as wheat, rice, pulses, sugar, and onions in India over the recent months poses a significant challenge for the union government, especially as they approach the general elections scheduled for April-May 2024.
Due to irregular and insufficient rainfall, the yearly retail inflation reached a 15-month peak of 7.44% in July. Additionally, food price inflation escalated to 11.5% during the same month, marking its highest level in over three and a half years.
In spite of the government’s measures to control food prices, including the ban on wheat exports, limitations on sugar, onion, and rice exports, pulse imports, and the sale of wheat, rice, and vegetables like onions from its reserves, food inflation, constituting almost half of the total consumer price basket, stood at 6.61% in October.
In October, the retail inflation for pulses surged to 18.79%, primarily driven by significant increases in the prices of tur (40.94%), gram (11.16%), and moong (12.75%). The inflation rate for tur surpassed the 37.3% recorded in September, despite the government’s initiative to boost imports from Africa and Myanmar by eliminating the import duty on tur in March.
The recent hailstorms in Maharashtra over the past few weeks have caused damage to the onion crop in areas like Nashik and Ahmednagar.
The arrivals of onions at mandis, which typically reach their peak at this time of the year, have decreased, leading to an increase in prices.
Unfavorable weather conditions have led to a delay in kharif onion sowing, resulting in reduced coverage and a delayed arrival of the onion crop. As stored rabi onions (harvested in April-May) are depleting and kharif onion arrival is delayed, a tight supply situation has emerged, leading to an increase in prices.