Rising food prices and a weak monsoon pose risks: India must act early to protect the most vulnerable

Subscribe to enjoy similar stories.Two data releases on 13 April held important messages for the government on ensuring food security and shielding the livelihood of citizens. First, inflation estimates released by India’s ministry of statistics for March suggest food inflation is rising faster than overall inflation. Second, early monsoon forecasts point to a high likelihood of deficient rains in 2026.

Based on the 2024 series, overall inflation increased to 3.4% last month, with rural inflation at 3.6% and urban at 3.1%. Food inflation was placed at 3.9% (4% in rural India and 3.7% in urban areas). The trend of India’s food inflation outpacing overall inflation has firmed up since January, when overall food inflation was 2.1% (2% rural and 2.4% urban).

Food inflation almost doubled between January and March in rural areas. Within food groups, vegetable oils (9%) along with eggs (5.5%), meat (12.5%) and fish (7.3%) have seen prices firm up, with those for a few other major item groups such as cereals (-1.3%) going down. Although inflation is rising, it is not yet very high.

Price expectations, however, are on the ascent. While supply uncertainty could have pushed prices of vegetable oils up, other food groups seem better insulated. Low inflation in cereals is partly a result of record domestic and global production, along with low international prices.

However, it is not current prices that should worry policymakers, but the likely trend ahead. Three factors could create pressures on food and overall inflation. First, the fate of war negotiations between the US and Iran has again created uncertainty in the global market.