Food price challenge continues, fear of hike in November-December- CMB College

Food price challenge continues, fear of hike in November-December

Although the retail inflation rate eased in October, food prices remain a challenge. The reason for this is that the food inflation rate has decreased slightly. It was 6.61 percent in October, while it was 6.62 percent in September. Major food products rose in October. Economic experts have also expressed the possibility of a rise in core inflation in November and December.

According to consumer price index (CPI)-based inflation data released on Monday, prices of pulses, fruits, eggs, sugar have increased. However, prices of vegetables have come down. However, by the end of October, prices of vegetables had increased. Especially onion prices are increasing continuously.

Experts expressed their opinion

In a recent Mint survey, leading economists of the country have also expressed fear of rising vegetable prices. If that happens, they say, their forecast for retail inflation could be at risk.

Also Read: Some relief to RBI ahead of meeting, retail inflation at 5-month low

Barclays economist Rahul Bajoria said retail inflation slowed in October, but the relief may be short-lived. Because onion prices are increasing. Non-perishable food prices are also under pressure. Due to this, November and December may also see a slight increase in the core inflation rate.

How much did the price of vegetables increase?

According to the data, daily food prices showed that onion prices increased by 10.9 percent on a monthly basis in October. However, the price of tomato has decreased by 9.3 percent during this period. There has been a slight decrease in potato prices.

Onions accounted for 0.64 percent and tomatoes for 0.57 percent in retail inflation. It may be mentioned that the prices of vegetables reached a 15-month high in July. Due to the rising prices, the government had to ban the export of rice and increase the duty on onion exports.

An estimate of more than five percent: The Reserve Bank of India’s Monetary Policy Committee (MPC) in its October meeting has projected retail inflation at 5.4 per cent in the current financial year 2023-24. Which is less than 6.7 percent in 2022-23.

The government has entrusted the RBI with the responsibility of keeping the retail inflation rate at four per cent with a margin of two per cent. The central bank mainly looks at retail inflation when considering the bi-monthly monetary policy.

Retail inflation trend this year

  • October 6.61 percent
  • September 6.62 percent
  • August 6.83 percent
  • July 7.44 percent
  • June 4.49 percent
  • May 2.91 percent
  • April 3.84 percent
  • March 4.79 percent

The prices of these items rose and fell within a month

Items September October

  • Pulses 18.79 16.38
  • Fruit 7.30 9.34
  • Eggs 6.42 9.30
  • Chinese products 4.52 5.50
  • Cereals 10.95 10.65
  • Vegetables 3.39 2.70
  • Spices 23.06 22.76

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