In charts: Volatile vegetables are making inflation bitter
NEW DELHI : Vegetable prices are once again burning a hole in people’s pockets and pushing retail inflation up. If not for double-digit vegetable inflation, the headline inflation in June would have remained below the Reserve Bank of India’s medium-term mark of 4% since January, Mint calculations show.
Worryingly, the prices of vegetables are surging rapidly in July, too, especially those of tomatoes, at a time when 65% of households report seeing their weekly spending shoot up by 50% or more. Even as soaring tomato prices may leave household meals with fewer flavours, it may not be reflected in the July inflation figures as prices were significantly higher last year.
This is expected to lead to a favourable base effect. Barclays, in a recent report, said while vegetable prices are expected to increase in July as well, the momentum may slow.
"However, recent seasonal price upticks have been larger than expected and a surge like last year cannot be completely discounted," the report said. Vegetable prices tend to correct after the summer but not entirely, which means there may be some relief in the coming months but prices may still be a pain point for the households.
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