Global Economy

India's food inflation likely to top 9 per cent, according to Nomura

India’s food inflation is likely to top 9 per cent on the back of high feedstock prices, according to a Nomura report.

The report sees food inflation surging in the second half of the year in Asia with major food importers like Singapore bearing the brunt of higher prices of staples.

China’s harsh COVID measures along with swine fever in Thailand and an excessive heat wave in India are some of the reasons that could spur food prices further.

“Consumers’ perception of inflation is strongly influenced by the prices of frequently purchased necessities, such as food, and can lead to higher inflation expectations,” Bloomberg quoted from the Nomura report.

India’s food inflation was marginally below the 8 per cent mark in May compared to 8.3 per cent in April.

“Locally, the onset of the summer heat wave has also contributed to the rise in food prices,” the finance ministry’s monthly economic report said today.

The finance ministry report expects the food prices and the headline retail inflation to come down on the back of timely arrival of southwest monsson.

Food inflation has been driven by high vegetable prices as heat waves scorched perishables.

“Retail food inflation has been higher than non-food and the difference may be partly attributed to the onset of summer heat waves as retail vegetable inflation, with a weight of 6 per cent in CPI basket, increased to 18.26 per cent in May 2022,” the finance ministry report added.

Not just vegetables, even high edible oil prices have led to a higher food inflation. India imports nearly 60% of its edible oil and with supply disruptions continuing due to the Russia-Ukraine war, the prices have surged.

The Nomura report flags that rice could become dearer as countries look for alternative in the wake of wheat prices remaining elevated.

To manage the domestic situation better, Centre had imposed a ban on wheat exports on May 13 to ensure stable prices and food security. Some relaxations were given on May 17 allowing those wheat consortium already registered with customs.


This website uses cookies. By continuing to use this site, you accept our use of cookies.