Annual food inflation in retail markets rose to 8.7% in November from 6.61% in October on year, as prices of vegetables, cereals, pulses and spices firmed up.The relevant consumer food price index (CFPI) last month recorded a sequential rise of 1.05% while food inflation in November, 2022 was 4.67% on year.

Deflation in edible oils became sharper in November compared to the previous month.

Retail onion inflation rose by a steep 86.46% in November as retail prices in several cities touched Rs 90/kg last month because of delay in arrival of kharif crops and unseasonal rains impacting the crops in Maharashtra and Karnataka. In February, 2020, onion inflation rose to 140% on year.

However retail prices of onion are likely to fall below Rs 40/kg by January from the current average prices of Rs 57/kg due to improvement in domestic supplies following the ban on exports last week, consumer affairs secretary Rohit Kumar Singh has stated.

Inflation in pulses rose to 20.23% in November from 18.7% in October this year while arhar variety of pulses reported a price rise of 42%. Prices of other varieties of pulses – moong (13.33%), gram (13.05%) and Urad (11.8%) also rose last month.

Decline in production and robust demand are the key factors that contributed to the rise in pulses inflation, officials said.

“The surge in food and beverages inflation was largely led by a sharp increase in vegetables inflation, even as seven of the 12 food sub-groups reported a moderation in their YoY inflation print,” Aditi Nayar, chief economist, ICRA Ltd said

Nayar stated cereals and spices persisted in double-digits for the 15th and 18th consecutive months, respectively, while that for pulses did so for the sixth straight month in November.

Overall cereals inflation last month was still at the double-digit level of 10.27% a marginal decline from 10.6% because of some softening of wheat prices.

Inflation in wheat declined further to 6.36% last month from 7.61% in September on year because of improvement in supplies due to open market sale being carried out by the Food Corporation of India (FCI). The corporation has sold 4.4 MT of wheat in the open market through weekly e-auction so far since June.

The FCI from next week will offload a higher quantity of 0.4 MT of wheat weekly in the open market from the earlier norm of 0.3 MT and the government is aiming to sell more than 10 MT of wheat in the current fiscal to cool down the prices.

Retail rice prices rose by 11.81% in November, marginally higher from the previous month. The government has banned exports of white rice and imposed 20% export duties on par-boiled rice to improve domestic supplies.

The inflation in ‘spices’ rose to 21.5% in last month as jeera (cumin seeds) prices rose sharply by 122%. Global and domestic supply constraints have pushed up jeera prices sharply since the beginning of the year.

Mustard oil and refined oil prices dropped sharply by 24% and 19% respectively last month on year while overall inflation in oils and fats category declined by 15%.