India's retail inflation in the month of October surged to a 14 month high of 6.2 per cent. This is primarly driven by the sharp rise in food prices.
Also, this is a noticeable jump from the 5.5 per cent inflation rate recorded in September 2024, with food inflation taking of the leas due to the surging prices of vegetables, fruits, and oils.
So, what are the factors contributing to this rise and what does in mean for consumers?
Let's take a look at look at the numbers - CPI and the Food Prices
The Consumer Price Index (CPI), in simple term means it measures inflation based on a basket of goods and services.
For October 2024 it stood at 6.21 per cent, which was a sharp uptick from the previous month's 5.5 per cent.
Breaking this down further, rural areas saw a higher inflation rate of 6.68 per cent, compared to 5.62 per cent in urban areas.
When we look at food inflation, the numbers are even more striking. The All India Consumer Food Price Index (CFPI) recorded an inflation rate of 10.87 per cent in October, compared to 11.09 per cent in urban areas and 10.69 per cent in rural areas.
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This highlights about the broad broad surge in food prices across both urban and rural sectors, with the most price hikes seen in vegetables and edible oils.
What’s Behind the Spike in Food Prices?
When we look at the numbers, it can in a way be said that the main factor for this surge is the soaring prices of vegetables.
October saw an inflation rate of 24.7 per cent in vegetable prices, a sharp increase compared to previous months. The rise in vegetable prices is partly due to seasonality and weather-related disruptions that affected supply chains.
Key Food Items Impacting Inflation
Several food items contributed to the rise in inflation during October, with certain categories seeing particularly sharp price hikes. For instance, there was massive rise in vegetable prices, particularly tomatoes, onions, and potatoes, pushed food inflation up. Following this, Fruits also saw a jump.
Image used for representational purposes only | Canva
Furthermore, the prices of edible oils continued to rise due to global supply chain challenges and increased demand.
Other Key Segments
Prices of cereals rose by 6.94 per cent, following a 6.84 per cent increase in September. Meat and Fish Inflation rose to 3.17 per cent, up from 2.66 per cent last month.
Rural vs Urban Inflation: A Clear Divide
There’s a noticeable difference between inflation rates in rural and urban areas. While rural inflation stood at 6.68 per cent, urban inflation was slightly lower at 5.62 per cent.
While the rise in inflation for October 2024 is concerning, it is essential to monitor how food prices evolve in the coming months.
