Tag: retail inflation

January Retail Inflation Hits Three-Month Low at 5.1% as Food Prices Rise Slowly: Govt Data

However, this time as well rural inflation remained higher than urban areas. In 2022-23, rural inflation was higher than urban inflation for the entire year.

New Delhi: Retail inflation in January fell to a three-month low of 5.1%, as prices of food items rose more slowly, as per data released by the National Statistical Office (NSO).

However, this time as well rural inflation remained higher than urban areas. In 2022-23, rural inflation was higher than urban inflation for the entire year.

According to moneycontrol, this trend of higher rural inflation has persisted for nearly two years.

Inflation rates in rural areas stood at 5.34%, down from 5.93% in the same month a year ago. In urban areas, it stood at 4.92%, down from 5.46% in the same month a year ago.

Food inflation accounts for nearly half of the overall consumer price basket. It rose 8.3% in January, compared with a 9.53% rise in December, Reuters reported. It was 6% in the year-ago period.
Prices of cereals rose 7.83% year-on-year in January compared to 9.93% in the previous month. Vegetable prices rose 27.03% compared to 27.64% in December, Reuters reported citing the data.

The decline in retail inflation follows a four-month high in December when it rose to 5.7%, led by higher food prices that rose 9.5% nationally. The prices of food also breached the 10% mark for urban consumers, hitting 10.42%, in the same month.

According to the Indian Express, January marked the 52nd month of retail inflation staying above the 4% in the 4+/- 2 per cent band of medium-term inflation target set by the Reserve Bank of India (RBI).

Core inflation in the non-food and non-fuel segment fell to a 50-month low of 3.6% in January, said the newspaper.

However, higher food inflation is a cause of concern as it has the potential of impacting the core inflation.

“This (core inflation) is a 50-month low and suggests that RBI’s monetary policy perhaps is working by compressing the demand. But the headline is still higher than the targeted 4% due to higher food inflation and continues to be a worry area for RBI because it has the potential of impacting the core inflation via wage-price spiral,” a note by India Ratings’ principal economist Sunil Kumar Sinha and senior analyst Paras Jasrai said, according to the Indian Express.

Urban food inflation moderated to 9.02% in January from 10.42% in December. Rural areas registered 7.91% food inflation in January as against 8.49% in the previous month, the newspaper reported.

High Food Prices Drive Wholesale Inflation to a Nine-Month High of 0.73% in December

A rise in WPI can affect input costs, which may lead to reduced profit margins unless businesses can pass these higher costs on to consumers by raising retail prices. India’s retail inflation also rose to a four-month high in December.

New Delhi: India’s wholesale inflation rose to a nine-month high of 0.73% in December, due to a sharp rise in food prices, data released by the commerce ministry on January 15 showed.

The Wholesale Price Index (WPI) inflation was in the negative zone from April to October and had turned positive in November at 0.26%, according to news agency PTI.

WPI inflation was at 5.02% in December 2022.

According to moneycontrol, at 0.73%, it is the second month in a row that wholesale inflation has printed in above zero. When WPI inflation is above zero, it suggests that there is an overall increase in the prices of goods at the wholesale level.

India’s retail inflation also rose to a four-month high in December.

A rise in WPI can affect input costs, which may lead to reduced profit margins unless businesses can pass these higher costs on to consumers by raising retail prices.

Experts told Business Today that WPI inflation will rise in the coming months, keeping retail inflation elevated at over 5%.

Price of pulses in the wholesale market in December 2023 was 19.6% higher when compared with the same month previous year, Deccan Herald reported. Paddy became costlier by 10.54%, milk by 6.95%, fruits by 4.85% and vegetables by 26.30% year-on-year during the month under review. However, potatoes, wheat, eggs, meat and fish became cheaper during this period, the data released by the Union Ministry of Commerce and Industry showed, the daily reported.

Rising Food Prices Push November Retail Inflation to 7.37% for Farm Workers, 7% for Rural Labourers

The figures were higher than October’s rates of 7.08% and 6.92% for farm workers and rural labourers, respectively.

New Delhi: In November, retail inflation for farm workers increased to 7.37%, and for rural labourers, it rose to 7.13%, primarily driven by higher prices of specific food items, according to an official statement.

The figures were higher than October’s rates of 7.08% and 6.92% for farm workers and rural labourers, respectively, PTI reported.

Food inflation stood at 9.38% and 9.14% for agricultural and rural workers, respectively, in November compared to the respective figures of 8.42% and 8.18% in October 2023, and 6.19% and 6.05% recorded in the corresponding month of previous year (November 2022), PTI cited the labour ministry statement as saying.

The two comparable numbers were 6.87% and 6.99% in November last year, the ministry said.

Two indices have been analysed: CPI-AL (Consumer Price Index-Agricultural Labourers) and CPI-RL (rural labourers).

CPI-AL measures the changes over time in the prices paid by agricultural laborers for a specified basket of goods and services. Similarly, CPI-RL measures the changes over time in the prices paid by rural labourers for a basket of goods and services.

The CPI-AL in November this year increased 12 points to 1,253, while the index for rural workers advanced 11 points to 1,262, the report said.

The two indices were 1,241 points and 1,251 points, respectively, in October this year.

The rise was driven by an increase in prices of rice, wheat atta, pulses, onion, turmeric whole, garlic, mixed spices, etc.

The report also noted that there has been an upward trend in the index across all the states except West Bengal (both CPI-AL and CPI-RL indices decreased) and Himachal Pradesh (CPI-AL index decreased).

Onion Prices Could Dip Below Rs 40/kg By January, Food Ministry Official Tells Press

Meanwhile, the food ministry said it is working on procuring onions from farmers for its buffer stock and that it is “continuously” selling from this stock in order to control prices.

New Delhi: Onion prices in India may fall to less than Rs 40 per kilogram as early as January, consumer affairs secretary Rohit Kumar Singh said according to the Press Trust of India.

He also said prices would not exceed Rs 60 per kg until then.

“Somebody said it will touch Rs 100 per kg, we said it will never cross Rs 60 per kg. So, all India average is now Rs 57.02 per kg this morning and it will not cross Rs 60 per kg,” PTI quoted Singh as saying on Monday (December 11).

Last week, the Union government banned onion exports until March, citing the need to make the vegetable available to Indian consumers at affordable prices.

“The government took the decision taking into account delay in kharif arrival, the quantity of onion exported and [the] global situation such as trade and non-trade restrictions imposed by major suppliers such as Turkey, Egypt and Iran,” the Union food ministry said.

The average retail price of onions in India was Rs 57.1 per kg earlier this month, almost double the average price in the same month last year (Rs 28.9 per kg), Bloomberg reported citing Union government data.

Prices were reportedly as high as Rs 80 per kg in Delhi.

Onion inflation has remained in the double-digits since July and rose to a near four-year-high of 42.1% in October, PTI’s report said.

A press release by the food ministry on Monday said that cooperative bodies under the ministry had been directed to procure seven lakh tonnes of onions from farmers for the government’s buffer stock.

It added that the government was “continuously” selling onions from its buffer stock to keep prices in check.

“Till date, about 5.10 lakh tonnes had been procured, and procurement of remaining quantity is ongoing. Onions [procured] by the government are continuously disposed in high price markets through open market sales and direct retail sales to consumers,” the ministry said.

Farmers in Maharashtra, which reportedly produces the most onions of any state in India, have protested the government’s decision to ban exports.

Consumer affairs secretary Singh reportedly said the protests were “sponsored by traders”.

He also said in an interview to The Hindu last month that traders taking advantage of delayed kharif harvests were partly to blame for the rise in onion prices.

“The traders take advantage of the situation in this little period. It is not just demand and supply, it is also manipulation by traders,” he said.

“Not all traders are bad, but some are taking advantage of this situation. It is not hoarding, it is speculation – spreading news of shortage. There is no instance of deliberate hoarding,” Singh was quoted as saying.

Onion prices in neighbouring South Asian countries rose after India’s export ban, with markets in Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives reporting steep price hikes.

India had introduced a minimum export price of $800 per tonne on onion exports on October 28. The extension of the curbs on onion export in the form of a total ban has come three weeks ahead of the expiry of the earlier deadline.

Union finance minister Nirmala Sitharaman said in parliament on Monday that retail inflation had become “stable” and was within the Reserve Bank of India’s tolerance limit.

Her remarks came a week after experts had raised concerns about rising food and retail inflation in the country.

After RBI and Barclay’s Alarms on Rising Inflation, FM Says Retail Inflation Now ‘Stable’

Sitharaman’s statement comes after Barclay’s estimated last week that India’s retail inflation may have crossed the RBI’s tolerance limit of 6% in November from 4.87% in October.

New Delhi: Union minister for finance Nirmala Sitharaman informed the Lok Sabha on Monday (December 11) that India’s retail inflation is now stable and within the Reserve Bank of India’s (RBI) tolerance band of 2% to 6%.

Sitharaman’s statement came in response to a starred question by Aam Aadmi Party MP Sushil Kumar Rinku about whether the Union government has “taken note” that the country’s retail inflation is “increasing steeply”.

“India’s retail inflation has declined from an average of 7.1% in April-October 2022 to 5.4% in the corresponding period of 2023,” Sitharaman said in her written reply.

“The retail inflation is now stable and within the notified tolerance band of 2% to 6%. A steady decline in core inflation, estimated after removing volatile food and fuel items from retail inflation, has been critical in weakening the inflationary pressure in the Indian economy. The core inflation has declined from 5.1% in April 2023 to 4.3% in October 2023.”

Sitharaman added that “temporary increases in inflation on a few occasions are caused by demand-supply mismatches arising out of global shocks and adverse weather conditions.”

She said that proactive supply-side initiatives by the government and effective demand stabilisation measures by the RBI have helped resolve the demand-supply mismatches and to rein in inflation.

Sitharaman’s statement comes after Barclay’s estimated last week that India’s retail inflation may have crossed the RBI’s tolerance limit of 6% in November from 4.87% in October, reported Mint.

In July, India’s retail inflation rate jumped to 7.44% – a 15-month high due to a massive surge in vegetable prices, data by the Ministry of Statistics and Programme Implementation showed. 

The data showed that retail inflation easily breached the upper limit of the RBI’s tolerance band of 2% to 6% for the first time in five months.

On Friday, RBI governor Shaktikanta Das said that high-frequency food price indicators “point to an increase in prices of key vegetables which may push retail inflation higher in the near-term,” reported The Indian Express.

“The near-term outlook is masked by risks to food inflation, which might lead to an inflation uptick in November and December,” Das said, adding that “food inflation is going to increase”.

He said that “significant progress” has been made in bringing down inflation to below 5% in October.

Das said that retail inflation is projected at 5.4% for 2023-24.

Sitharaman said that the measures taken by the government to restrain inflation include the strengthening of buffers of key food items and making periodic open market releases, easing imports of essential food items through trade policy measures, preventing hoarding through the imposition/revision of stock limits, and channelling supplies through designated retail outlets.

She added that to ensure food security to the poor, the Pradhan Mantri Garib Kalyan Anna Yojana that provides free food grains to about 81.35 crore beneficiaries, has been extended for a period of five years with effect from January 1, 2024.

She also cited that in October, the Union government also increased the subsidy under the Pradhan Mantri Ujjwala Yojana from Rs 200 to Rs 300 per 14.2 kg cylinder.

In August, the Narendra Modi government reduced the price of LPG cylinders by Rs 200 and pegged it as a “Rakhi gift” to the women of the country. 

However, the cut ended up highlighting inflation and the price increase of the last three years.

Government Lifts Curbs to Allow Tomato Imports From Nepal; Veggies To Reach UP by Friday

The increase in tomato prices this year is expected to linger until October due to a tightening in supply.

New Delhi: Union finance minister Nirmala Sitharaman announced in parliament on Thursday (August 10) that the government has initiated tomato imports from Nepal.

The move comes amid an increase in tomato prices across the country, which reached as high as Rs 250 per kg in some markets in July.

“We have … initiated imports from Nepal by removing the import restrictions, and the first lot of tomatoes from Nepal are likely to reach Varanasi, Lucknow [and] Kanpur by Friday itself,” Sitharaman said during Thursday’s no-confidence debate in the Lok Sabha.

She also spoke of other measures the government was taking to provide relief from the price rise.

“Procuring of tomatoes from tomato-growing regions of Maharashtra and Andhra Pradesh, and also Karnataka, and distribution of these through cooperative societies like NCCF [National Cooperative Consumers’ Federation] and NAFED [National Agricultural Cooperative Marketing Federation of India] are all happening,” she said.

“[In] Bihar, West Bengal, Uttar Pradesh, Delhi and Rajasthan, this has already started from July 14.”

Also Read: Tomatoes: The Modi Government Has Made a PR Stunt Out of a Real Issue

Sitharaman added that mobile vans were selling tomatoes in Delhi and that the NCCF will hold a mega-sale of the vegetable in the city this weekend, selling it at a subsidised price of Rs 70 per kg.

Tomatoes experienced a runaway price rise in India starting in June due to a combination of factors including erratic monsoon rains, higher temperatures and tomato virus outbreaks.

News agency Reuters reported that although tomato prices usually start decreasing in August when the harvest reaches markets, tight supplies this year may cause prices to remain high until October.

Other crops have been affected by the monsoon as well. The resulting increase in food prices is expected to likewise push retail inflation levels above the Reserve Bank of India’s (RBI) upper target of 6%.

The RBI’s monetary policy committee said on Thursday that it projected consumer price inflation for Q2 this year at 6.2%.

Rising Food Prices Drive June Retail Inflation to a Three-Month High of 4.81%

According to government data, the inflation in the food basket was at 4.49% in June, higher than 2.96% in May. The food basket accounts for nearly half of the Consumer Price Index.

New Delhi: Retail inflation rose to a three-month high of 4.81% in June, mainly on account of rising prices of vegetables and pulses, data released by the government on Wednesday, July 12 showed.

In March, the Consumer Price Index-based inflation was recorded at 5.66%.

According to the data released by the National Statistical Office (NSO), the inflation in the food basket was at 4.49% in June, higher than 2.96% in May. The food basket accounts for nearly half of the CPI.

According to CNBCTV-18, rural inflation rose to 4.72%, up from 4.17% in May, while urban inflation increased to 4.96% from 4.27% in the same period.

Aditi Nayar, chief economist and head – research and outreach, ICRA, told PTI that the spike in vegetable prices is set to push the CPI inflation to an uncomfortable 5.3-5.5% in July.

“We expect the vegetable price shock to result in the Q2 FY2024 CPI inflation exceeding the (RBI’s) Monetary Policy Committee’s last forecast of 5.2%,” she told the news agency.

“Accordingly, we anticipate that the [RBI] committee will retain its hawkish tone in August 2023, keep the repo rate unchanged and signal that a pivot to rate cuts remains distant,” she said.

Suvodeep Rakshit, senior economist at Kotak Institutional Equities, told CNBCTV-18 that the June CPI inflation of 4.8% exceeded expectations slightly due to a surge in vegetable prices, accompanied by a modest increase in pulses prices.

“This trend in vegetable prices continued in July too. Core inflation was broadly unchanged at 5.1% but will likely moderate over the next few months. Overall, we see upside risks to CPI inflation over the next few months as monsoon-related risks on food prices play out,” he said.

Narinder Wadhwa, national president of Commodity Participants Association of India, told the news agency: “It [the rise in food prices] may be influenced by various factors such as changes in demand-supply dynamics, fluctuations in global commodity prices, government policies, or other economic factors. The rise in inflation is higher than street’s expectations.”

Retail Inflation Falls to 5.66% In March: Govt Data

The country’s rural inflation in March stood at 5.51%, while urban inflation was at 5.89%.

New Delhi: Retail inflation eased to 5.66% in March, data from the Ministry of Statistics and Programme Implementation showed on Wednesday, April 12.

According to the Indian Express, rural inflation in March stood at 5.51%, while urban inflation was at 5.89%.

The retail inflation based on Consumer Price Index (CPI) was 6.44% in February 2023, which was still above the tolerance band of the Reserve Bank of India (RBI).

The inflation figure in March is within the RBI’s comfort zone as it is below 6%. It was 6.95% in the same month in the year-ago period.

The RBI in its latest bimonthly monetary policy last week kept the repo rate unchanged at 6.5%. The central bank projected inflation to fall to 5.3% in fiscal year 2023-24.

According to the National Statistical Office, the inflation in the food basket was 4.79% in March, as against 5.95% in February and 7.68% in the year-ago period.

Separately, India’s industrial output in March rose 5.6% year-on-year.

Factory output measured in terms of the Index of Industrial Production (IIP) increased 1.2% in February 2022, the MoSPI data showed, the daily reported.

Meanwhile, India’s manufacturing sector’s output increased 5.3% in February and mining output grew 4.6%.

Retail Inflation Remains Above RBI’s 6% Upper Band for Second Consecutive Month

The retail inflation in February was slightly lower than in January (6.52%), data released by the National Statistical Office showed.

New Delhi: At 6.44%, India’s retail inflation remained above the Reserve Bank of India’s upper band (6%) for the second month in a row in February. The retail inflation in February was slightly lower than in January (6.52%), data released by the National Statistical Office showed.

According to Business Standard, the inflation being higher than the RBI’s limit for the second consecutive month may lead to another 25 basis points rate hike by the Monetary Policy Committee, which will meet in April.

The price of food items like meat, fish, eggs and pulses as well as fuel and light had eased a little in February, but continued to rise for cereals (16.73%), milk (9.65%), fruit (6.38%) and housing (4.83%).

Rural inflation, at 6.72% (down from 6.85% in January), continued to be higher than urban inflation (which was at 6.10% in February, up from 6% in January), Indian Express reported.

“Second consecutive month of more than 6% inflation makes the monetary authority’s job difficult. Impact of monetary policy is felt with a lag and monetary tightening of FY23 would push the inflation rate down. However, the stickiness of core inflation is turning out to be a major problem for the monetary policy committee… price trends and indicators available at present are making the monetary policy committee’s job difficult. However, India Ratings believes the odds are more in favour of another 25 bps repo rate hike in April 2023 monetary policy. India Ratings expect March 2023 retail inflation to be 5.7% leading to 4QFY23 retail inflation to be higher than 6%, five consecutive quarters of more than 6% inflation,” Sunil Kumar Sinha, principal economist, India Ratings, said.

“There is concern on milk inflation at 9.7%. The prices have been raised often this year – at least 3 times to adjust for higher fodder costs. These prices will never come down. Spices inflation has peaked at 20% which though has a small share in the basket is significant in terms of reflecting demand-supply mismatches. Prepared meals/foods have witnessed inflation of 8% as costs have been passed on. Here it should be remembered that prices are seldom reduced even when costs come down,” Madan Sabnavis, chief economist, Bank of Baroda, added.

Retail Inflation Falls to 6.77% In October, but Stays Above RBI’s Tolerance Level

The Consumer Price Index-based retail inflation has remained above the Reserve Bank of India’s 6% target since January this year.

New Delhi: Retail inflation dropped to 6.77% in October from 7.41% in the preceding month, mainly due to easing prices in the food basket, government data showed on Monday, November 14.

However, it remained above Reserve Bank of India’s comfort level for the 10th month in a row, the data showed.

The Consumer Price Index (CPI)-based retail inflation has remained above the 6% target since January this year.

As per the latest data released by the National Statistical Office (NSO), the inflation in the food basket was 7.01% in October as against 8.6% in September.

The retail inflation, which the RBI factors in while deciding its periodic monetary policy, was 4.48% in October 2021.

As the RBI failed to ensure inflation remains at 4% with a margin of 2% on either side for three consecutive quarters, it has sent a report to the government detailing the reasons for the failure and steps it is taking to bring CPI in the target range.

Another set of data released earlier in the day revealed that the wholesale price index (WPI)-based inflation dipped to a 19-month low of 8.39% in October on easing prices of food, fuel and manufactured items.

(PTI)