Onion Prices Stay High in India Despite Overall Vegetable Price Drop
In November, the prices of onions in India remain high, even as other vegetable prices have decreased by 4.1% month-on-month, according to a report by ICICI Bank. While there is some relief in overall vegetable prices, onions continue to contribute to inflationary pressures in the country.
Despite the recent dip, vegetable prices are still high on an annual basis, reaching a 57-month peak with a 42% year-on-year increase in October. This surge is mainly due to significant price hikes in essential items like tomatoes, potatoes, and onions. Tomato prices have increased by 161% year-on-year, while potatoes and onions have risen by 65% and 52%, respectively.
The report attributes this price surge to heavy rains in August and September, which disrupted supply chains and reduced mandi arrivals by 28% over the past two months. This led to a 49% month-on-month increase in tomato prices in October. Although November has seen some deceleration, onion prices remain consistently high.
The high prices of essential vegetables have also driven India’s retail inflation to a 14-month high of 6.21% year-on-year in October. Core inflation, excluding food and energy prices, rose to 3.7% in October from 3.5% in September. Within the food sector, vegetable prices continued to rise sequentially, with an 8.2% month-on-month increase in October, following a 3.5% rise in September. This trend highlights the significant impact of vegetable prices on overall food inflation.
The ongoing price trend, largely driven by weather disruptions, remains a key factor affecting India’s economic outlook in the near term.
Doubts Revealed
ICICI Bank -: ICICI Bank is one of the largest private sector banks in India. It provides financial services like loans, savings accounts, and investment options to people and businesses.
Mandi -: A mandi is a marketplace where farmers sell their produce, like vegetables and fruits, to traders and buyers. It’s an important part of the supply chain in India.
Retail inflation -: Retail inflation is the rate at which the prices of goods and services increase for consumers. It affects how much people have to pay for things they buy every day.
Month-on-month -: Month-on-month is a way to compare prices or data from one month to the next. It helps to see if things are getting more expensive or cheaper over a short period.
Year-on-year -: Year-on-year is a way to compare prices or data from the same month in different years. It helps to see how much things have changed over a whole year.
