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Retail prices in June soar to 5.08% after cooling to its lowest in a year
Rabi or winter-sown onion output declined by 20% to 19 million tonne this year. Rabi onion usually accounts for nearly 72% of India’s annual supply
New Delhi: India’s consumer inflation edged up to 5.08% in June from a year ago, after cooling to a 12-month low of 4.80% in May, driven by food prices, especially vegetables, data from the ministry of statistics and programme implementation showed on Friday.
The growth in the Consumer Price Index exceeded forecasts. Economists polled by Mint, a sister publication of HT, expected retail prices to rise to 4.9% in June.
Food prices rose sharply to 9.36% in June, a jump from 8.69% in the previous month.
Hot weather and heavy rain have pushed up prices of most groceries, especially tomatoes, potatoes and onions.
Rabi or winter-sown onion output declined by 20% to 19 million tonnes this year. Rabi onion usually accounts for nearly 72% of India’s annual supply.
“Food inflation is the main factor behind the grudgingly slow pace of disinflation. Recurring and overlapping supply-side shocks continue to play an outsized role in food inflation,” RBI governor Shaktikanta Das had said in the minutes of the monetary policy committee meeting held in June.
Last month, a delayed monsoon and blistering temperatures, followed by heavy rains, disrupted supplies. Perishability, worsened by heat waves, is another reason for shortages and high prices, traders said.
Vegetables prices leapt to a staggering 29% in June, while pulses rose 16%. Food makes up nearly half of the retail consumer basket.
The Reserve Bank of India (RBI) has forecast that retail inflation would ease to an average of 4.5% this year from 5.4% in 2023-24.
