Crisil and Bank of Baroda data show broad declines in vegetable and pulse prices, keeping meal inflation subdued
The cost of a home-cooked meal eased in October as prices of major vegetables declined sharply, according to Crisil’s latest Roti Rice Rate report released on Friday.
Crisil’s data showed that, on-year, vegetarian thali costs had dropped about 17 per cent in October, while non-vegetarian thali costs were down roughly 12 per cent. The decline stemmed from sharp corrections in potato, tomato, onion and pulses, and from a moderate fall in broiler prices. Vegetable oil and LPG prices, however, rose on-year, tempering a deeper fall in overall thali costs.
Month-on-month, thali prices saw smaller movements: vegetarian meals were 1 per cent cheaper and non-vegetarian thalis were down around 3 per cent. Onion and tomato eased 3 per cent and 8 per cent respectively, while most other components remained steady. A 4 per cent decline in broiler prices due to oversupply contributed to the drop in non-vegetarian meal costs.
“Onion prices slipped 51 per cent, tomato slid 40 per cent, and potato fell by 31 per cent, thus helping lower the overall cost of thalis. The decline in the non-veg thali cost was on account of an estimated 6 per cent drop in broiler prices amid oversupply,” the report noted.
The agency tracks thali prices using countrywide input costs to gauge monthly household spending trends.
Pushan Sharma, director research at Crisil Intelligence, said onion prices may edge up and potato prices could remain firm through November. He added that potato rates may soften once cold-storage stocks are released in mid-December. Sharma also said: “Pulses prices may rise in the near term, reflecting the impact of excess rainfall on kharif yields and the recent imposition of a 30 per cent import duty on yellow peas. Should the government extend the import duties to other pulses, prices could witness a steeper rise.”
According to Bank of Baroda (BoB) separately reported that its essential commodities index (ECI) remained in deflation for the sixth straight month. BoB said its ECI declined 3.6 per cent in October, the steepest fall since the index was created, and slipped a further 3.8 per cent in the first week of November.
“Out of 20 commodities, prices of 10 declined. Within this, the most noticeable decline was visible in the case of vegetables. In fact, prices of TOP vegetables (tomato, onion and potato) have seen a sustained fall this year. Major pulses have also continued to witness a deflationary trend. Within this group, the price of tur dal has dropped most significantly by 29.4 per cent — the largest decline since January 2018,” the bank said.
BoB indicated that retail inflation for October was likely to fall in the 0.4 per cent to 0.6 per cent range. The bank noted that food inflation had been easing, mainly because vegetable prices, especially tomato, onion and potato, have remained in deflation. It said this trend was being supported by higher mandi arrivals and was expected to continue in the coming months as the harvesting season progresses.
