Food, veg prices may keep retail inflation at 5% till year-end

livemint.com:

NEW DELHI : Economists project that retail inflation will hover around 5% in the July-September and October-December quarter of the current financial year due to skyrocketing prices of food and some vegetables. In May, the consumer price index-based inflation eased to 4.25% from 4.70% in April. Cereals and pulses inflation, however, were high at 12.7% and 6.6%, respectively.

Since 1 May, the all-India average retail prices of wheat and atta (wheat flour) have risen 2.3% and 1.3%, respectively, while a rise in kharif pulses such as tur dal (pigeon pea) and urad (black gram) have been 12.4% and 4.2%. The all-India average retail price of rice has also increased to ₹40.42 per kg on 5 July from ₹38.48 a kg, according to data from the consumer affairs ministry’s price monitoring cell. The prices of these commodities have risen despite several interventions by the government, especially in June.

The all-India average retail price of tomato, which was quoted at ₹23 a kg on 1 May is now being sold at ₹91 per kg, while onion prices have gone up to ₹25.63 a kg from ₹22 in the same period. “Since September last year, cereal inflation has been in double digits, and it peaked in February," Devendra Pant, chief economist of India Ratings, said. Though it shrank during March-May, it is still high, he said.

Milk inflation is nearing 9%, which is more than November’s 8%. Spices inflation has also been in double digits since June 2022 and is currently at 17.9%. “Cereal, milk and spices prices are expected to keep food and beverages inflation as high as 4.5-5.5%, taking headline inflation to 5.2% in Q2 and 5.3% in Q3 of FY24," he said.