A Closer Look
The cost of a home-cooked vegetarian thali increased by 11% in July, while the non-vegetarian thali saw a 6% rise, according to CRISIL's Market Intelligence and Analytics division. This increase in food costs is primarily attributed to the rising prices of key vegetables like onions, tomatoes, and potatoes.
Tomatoes: The price of tomatoes witnessed a significant jump of 55% on a monthly basis, reaching Rs 66 per kg in July compared to Rs 42 per kg in June. This surge is attributed to high temperatures impacting the summer crop in key states like Karnataka and Andhra Pradesh. Additionally, scattered rainfall in May in Karnataka escalated whitefly infestation, further affecting crop output.
Onion prices also saw a 20% increase on a monthly basis, contributing to the overall rise in food costs. This increase is primarily due to lower rabi production.
Potato prices experienced a 16% rise on a monthly basis, driven by late blight infestation in Punjab, Gujarat, and Uttar Pradesh.
Despite the monthly increase, the cost of both vegetarian and non-vegetarian thalis has actually decreased compared to the previous year. The vegetarian thali cost fell by 4% year-on-year to Rs 32.6 in July 2024, while the non-vegetarian thali saw a 9% decline to Rs 61.4. This decrease is primarily attributed to a 40% drop in tomato prices compared to the previous year.
The slower rise in the cost of the non-vegetarian thali compared to the vegetarian thali is attributed to stable broiler prices. Broiler chicken comprises over 50% of the total price of the non-vegetarian thali, and its stable price helped mitigate the impact of rising vegetable costs.
Recent heavy rainfall in Himachal Pradesh, a key supplier of tomatoes to northern India, has raised concerns about a potential surge in tomato prices in the near future. The rainfall has caused crop damage and disrupted supply chains, potentially leading to higher prices in the coming weeks.
To address the rising tomato prices, the National Consumer Cooperative Federation (NCCF) intervened by selling tomatoes at Rs 60 in Delhi and Mumbai after prices crossed the Rs 100 mark. This intervention helped stabilize prices in the retail market.
While food inflation remains a concern, the year-on-year decrease in thali costs offers some relief. However, the recent rainfall in Himachal Pradesh and its potential impact on tomato prices necessitate continued monitoring and intervention to ensure food affordability for consumers.