Food inflation rises to 8.66% in Feb on costlier vegetables

Annual food inflation in February, 2023 was 5.95% on year.

Deflation in edible oils continued in February.

Inflation in vegetables was 30.25% last month, while prices rose by 27.03% in January, 2024 on year.

Rise in retail prices of tomatoes last month was 42.01% against an increase of 38.01% in January, 2024 on year. Retail inflation onion was 22.1% last month, while prices rose by 29.69% in January, 2024 on year.

Potato prices, which were in the negative zones since February, 2023, rose by 12.38% last month on year. Brinjal prices last month rose by 23% on year.

“Vegetable inflation is the highest at 30.3% and with onion prices going up again, will continue to exhibit such tendencies,” Madan Sabnavis, chief economist, Bank of Baroda said, adding that the horticulture output this year is expected to be lower than last year.

Inflation in the meat and fish category rose by 5.21% last month, while the rise in prices in January, 2024 was only 1.19% on year. Chicken prices rose by 5.69% last month because of higher feed prices, while prices declined by 4.02% in January, 2024 on year.

Overall cereals inflation last month dropped marginally to 7.6% from 7.83% on year in January, 2024 because of some softening of wheat prices.

Inflation in wheat declined further to only 2% in February from 12% in July,2023 on year because of improvement in supplies due to open market sale being carried out by the Food Corporation of India (FCI). The corporation has sold a record 9.6 MT wheat in the open market through weekly e-auction this fiscal.

Retail rice prices rose by 12.84% last month, marginally lower from previous month. The government has banned exports of white rice and imposed 20% export duties on par-boiled rice to improve domestic supplies.

Inflation in pulses declined to 18.9% in February from 19.54% in January, 2024 while arhar variety of pulses reported a price rise of 36.82%.

Aditi Nayar, chief economist, ICRA said spike in food inflation was not broad-based, with seven of the 12 sub-items witnessing a moderation in their year-on-year inflation print. “The eggs, meat and fish and vegetables categories witnessed a sharp rise in their inflation prints, pushing up the food and beverages inflation for Feb 2024,” Nayar said.

The inflation in ‘spices’ category was 13.51% last month on year, a decline from 16.36% in January, 2024. Jeera (cumin seeds) prices rose sharply by 65.25% last month, while prices rose by 89.83% in January, 2024 on year.

Mustard oil and refined oil prices dropped sharply by 18% and 21% respectively last month on year while overall inflation in oils and fats category declined by 13.97%.