High food price despite slight decrease in inflation

Source: The post high food price despite slight decrease in inflation has been created, based on the article “Food factor: Policymakers must keep in mind that inflation hits the poor the hardest” published in “The Hindu” on 15th June 2024

UPSC Syllabus Topic: GS Paper 3 – Indian Economy- Growth and Development

Context: The article discusses how food prices in India, especially for vegetables and pulses, remained high last month despite a slight overall decrease in inflation. Prices for items like tomatoes, onions, and potatoes increased significantly both at retail and wholesale levels.

For detailed information on Inflation in India- Reasons and Solutions read this article here

What Is the Current Status of Retail Inflation?

Retail inflation eased to a 12-month low of 4.75% in May.

Food price inflation remains high at 8.69%, driven by vegetables and pulses.

Vegetable inflation stayed above 27% for six months, reaching 27.3% in May.

Prices for tomatoes, onions, and potatoes increased by 1.5%, 0.5%, and 15.1% respectively.

Cereal prices rose, with rice up 13%, wheat 5.7%, and wheat flour 4.7% year-on-year.

Pulse prices, including gram dal, tur, urad, and moong, increased by 17%, 27%, 13%, and 8.5% respectively.

What are the concerns related to inflation in India?

1. Urban Areas Hit Harder: Urban consumers are experiencing higher food inflation, with a recent high of 8.83% in cities and towns.
2. Impact of Weather on Prices: The India Meteorological Department noted a rainfall deficit of 12% since the start of June, which could influence future food prices, despite predictions of an ‘above normal’ monsoon.

Question for practice:

Discuss the impact of recent inflation trends on vegetable and pulse prices in India.