Onion, tomato price fall made food prices ease in January: Crisil report

The fall in prices of onion and tomato in January gave some relief to consumers. A new Crisil report has stated that the food prices in the month declined after prices of onion and tomato decreased by 26% and 16%, month-on-month. 

“The easing was due to a decrease of 26% and 16% on-month in prices of onion and tomato, respectively, with higher domestic supply of onion amid export curbs and fresh tomato arrivals from the northern and eastern states,” Crisil noted.

However, the report noted that the price of a vegetarian thali has gone up by 5 per cent in the last one year, while for a non-vegetarian thali, the price has gone down by 13 per cent. 

The Roti Rice Rate (RRR) report compiled by Crisil noted that a vegetarian thali with roti, onion, tomato and potato, rice, dal, curd and salad is available for Rs 28 in January 2024. The price of the same thali was Rs 26.60 in January 2023. 

A non-vegetarian thali with roti, onion, tomato and potato, rice, chicken (broiler), curd and salad can be bought for Rs 52. It was available for Rs 59.9 during the same period.

"The cost of the non-veg thali declined faster due to a decline of 8-10 per cent on-month in prices of broilers," the report added. 

The price of a veg thali was Rs 29.7 in December 2023. 

“The cost of the veg thali increased due to a surge of 35% and 20% on-year in prices of onion and tomato, respectively,” Crisil said. 

The report said that higher prices of rice and pulses from last year were also reasons for higher prices of home cooked veg meal in January from previous year.

It is to be noted that in December, the retail inflation was 5.69 per cent with food inflation at 9.53 per cent, whereas in January 2023, retail inflation was reported at 6.52 per cent, with food inflation at 5.94 per cent. 

In the April-December 2023 period, the highest monthly retail inflation was reported in December, after July and August. In July, the inflation rate was 7.4%, which was the highest in 15 months due to a sharp rise in prices of vegetables and other food items such as pulses, spices and cereals.   

Finance Minister Nirmala Sitharaman on Tuesday said the Centre has taken a slew of measures to tame food inflation in recent months including importing pulses and releasing onion stocks at a lower price.

Speaking in the Rajya Sabha, FM Sitharaman said the government has readied stocks to release onions at a subsidised rate of Rs 25 a kilogram to curb the escalating onion prices, through the National Cooperative Consumers' Federation of India Ltd (NCCF), NAFED, Kendriya Bhandar, and other state-controlled cooperatives. 

She added: "As of 3 February 2024, we have released 3.96 lakh tonnes of onions in the market at that price."

Inflation in the food sector, denoted by the consumer food price index, showed an increase to 9.53% in December. This is an escalation from 8.70% identified in November, and a substantial rise compared to October's measure of 6.61%, as well as September's figure of 6.62%.

In its research report in January, Crisil had reported that anxiety about inflation, especially about the spikes in food prices, may have reduced among Indians through December and January citing Google search trends for the prices of tomatoes, onions and potatoes (TOP). 

Crisil economists wrote that worries about price rise may have eased since December with searches for onion and tomato prices dropping. Yet, the overall Google Trends Index value based on searches for inflation, was still above 2018-2021 levels, indicating anxiety remains high compared with that period. 

“Though inflation anxiety is easing, high and volatile food prices could lead to a rise in inflation anxiety, if the price pressures persist… easing inflation anxiety about TOP prices and cooling of non-food inflation has brought some relief at the end of the calendar year,” the economists said in a report, ‘An unlikely gauge of price angst’. 

Also read: Costlier food items to keep pressure on wholesale inflation

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