Since last month, people’s face is turning red after hearing the price of green vegetables. The ever-increasing vegetable prices have troubled every 90 percent of the households in India. At the same time, inflation in edible oils seems to be boiling. The retail inflation data released on Tuesday is also saying the same.
Hoarding of soybean and mustard oil increased inflation, big hoarders in Madhya Pradesh, Maharashtra and Rajasthan
As expected, retail inflation crossed the 6 per cent mark in March and stood at 6.95 per cent. According to the data released by the statistics ministry, the rise in inflation has been due to edible oils and vegetables. The inflation rate of these two food products, which form a major part of the household budget, has been in double digits.
Inflation of edible oils in rural areas higher than in cities
According to the data, the inflation rate of edible oils and fats stood at 18.79 percent in March. Whereas, the inflation rate of vegetables has been 11.64 percent. That is, Indian families have paid more money on both these items. Inflation rate of edible oils was 20.75 percent in rural areas and 15.15 percent in cities. Similarly, the inflation rate of vegetables was 10.57 percent in rural areas and 13.37 percent in urban areas.
Spending more on clothes and footwear: Talking about non-food items, people have to spend more on clothes and footwear in the last month. According to the data, the inflation rate of clothing in March was 9.06 percent and the inflation rate of footwear was 11.29 percent. During this period, the inflation rate of transport and communication has been eight percent.
The impact of the Russo-Ukraine War
The Russia-Ukraine war has been a major factor in the rise in the inflation rate of edible oils. These two countries are the third largest producers of edible oils in the world. At the same time, Ukraine is a major producer of sunflower oil. The supply chain is being affected by the war. Due to this the price of edible oils is increasing continuously. The war between the two countries has been going on since February.
Interest rates may increase from June
According to Aditi Nair, Chief Economist of ICRA, if the retail inflation rate next month does not come down compared to March, then there may be a hike in interest rates from June 2022.
Inflation rate of major food articles (in %)
most expensive states
West Bengal, Uttar Pradesh, Assam, Madhya Pradesh and Telangana.
cheapest state
Tamil Nadu, Punjab, Kerala, Karnataka and Delhi.
Data collected from 1114 urban markets