Rising demand and tight supplies have seen prices of vegetables soar in recent months, with potato, tomato, onions, ginger and garlic rising sharply and making food costlier for households. Several states in the east, north and southern parts of the country have witnessed heatwave conditions, with temperatures in some places hovering above 45 degrees Celsius.
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Vegetable inflation has emerged as the most volatile component, thanks to erratic weather conditions such as heatwaves, patchy and uneven rains, and pest attacks which have hurt supplies and pushed up prices.
While overall retail inflation slowed to an 11-month low of 4.8% in April, prices of vegetables and pulses remained stubborn. For example, garlic and ginger prices inflation have ruled in triple digits in March and in April, garlic inflation was at an annual 110.1%, while ginger was at 54.6%. Potato inflation was at 53.6%, onion at 36.6% and tomato at 41.8%.
Turning to pulses, inflation for arhar and tur was at 31.4%, urad at 14.3%, gram split at 13.6% and gram whole at 14.6%, data for April showed. Even chicken inflation in April was in double digits at nearly 14%.
“The demand for dal and vegetables is continuously, rising while supplies are sluggish. Prices of vegetables are particularly impacted due to adverse weather that shrinks supplies. The heatwave will hit it further,” said Ashok Gulati, Infosy chair professor at economic think tank Icrier .
“The solution for days is to invest in R&D to increase their productivity and reward them for being more nutritious and benign to the environment (soil, water, greenhouse gas emissions). Liberalize their imports in the short run,” said Gulati.
RBI has said a record rabi wheat production would help temper price pressure and replenish the buffer stocks.
