Food Prices Rise in India: Vegetables, Milk, and Cereals Lead the Surge
In June, food inflation in India increased significantly, pushing the overall Consumer Price Index (CPI) inflation to 5.1% from 4.8% in May. A report by CRISIL highlighted that the rise in food prices, especially vegetables, cereals, milk, and fruits, was a major factor.
Vegetable Prices Soar
Vegetable inflation reached 29.3% in June, up from 27.4% in May. Both TOP (tomatoes, onions, potatoes) and non-TOP vegetables saw price increases. Onion prices surged by 58.5%, and potato prices rose by 57.6%. Although tomato inflation eased to 26.4% from 41.3%, non-TOP vegetables like leafy greens, brinjal, lady’s finger, and pumpkin saw inflation rise to 19.7% from 18.8%.
Other Food Items
Foodgrain inflation remained high at 10.2%, with cereals inflation slightly increasing to 8.8%. Pulses inflation eased to 16.1%, with arhar dal prices dropping to 26.9%. Milk prices rose for the first time in 13 months, with inflation at 3%. Edible oils continued to see lower disinflation at -2.7%, and spices inflation softened to 2.1%.
Fuel and Non-Food Inflation
Fuel prices fell by 3.7% year-on-year in June, remaining in deflation for the 10th consecutive month due to global oil price pressures and government subsidies for LPG. Electricity inflation moderated to 8.8%, while non-food inflation eased to a record low of 2.3%. Core inflation stayed at a record low of 3.1%, and services inflation dropped to 2.9%.
Rural vs. Urban Inflation
Rural inflation rose to 9.2%, while urban inflation increased to 8.8%. Fuel inflation was lower in rural areas at -0.8% compared to -7.7% in urban areas. Core inflation was higher in rural areas at 3.3% compared to 3% in urban areas, indicating a higher inflation burden for rural residents.
