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Consumers are bracing for higher grocery bills as kitchen staples, including onions, cooking oil, sugar, rice, and several pulses, have registered sharp price increases over the past year, even as potato and tomato prices remain subdued.
Pushan Sharma, director of research at Crisil Intelligence, said the recent rise in food prices is not a broad-based, demand-led food inflation story. Instead, it is primarily a combination of supply shocks, weather disruption, and a price spike driven by geopolitical conflict in a handful of important commodities.
The all-India average retail price of onions rose to ₹54.13 a kilogram on September 24, almost double the ₹27.21 recorded a year earlier, according to data from the Department of Consumer Affairs. Wholesale prices more than doubled to ₹4,617 a quintal from ₹2,107, and retail onion prices climbed 24% in a single month.
The current onion spike, however, is largely a supply-side problem and is expected to ease once the next crop reaches the markets.
Sharma noted that commodities such as onion are experiencing a transient spike that should peak over the coming weeks before easing as the Kharif harvest lifts supply in October.
Madhavi Arora, chief economist at Emkay Global Financial Services, said part of the increase in vegetable prices is seasonal and weather-related, adding that vegetable inflation can be extremely volatile and tends to correct once supply conditions normalise.
The central government has also been releasing buffer onion stocks at ₹35 a kilogram through the NCCF, NAFED, Kendriya Bhandar, and mobile vans, while expanding supplies by rail and road, including the Kanda Express, to reach major consumption centres.
Unlike vegetables, however, edible oils could keep household costs elevated for much longer.
According to consumer affairs ministry data, retail sunflower oil is up 19.5% year on year at ₹193.97 a kilogram, palm oil has risen 15.9% to ₹153.61, and soybean oil is up 13.9% to ₹167.11. Peanut oil is 11.4% higher, and mustard oil is up 8%.
'Among the crops showing a price spike, edible oil could be more persistent than others, given the continuation of the West Asia conflict, as well as key suppliers such as Indonesia diverting an increasing share of their palm oil production towards biodiesel over the years,' Sharma said.
Arora stressed that pulses and edible oils deserve closer attention because India's import dependence leaves domestic prices exposed to global prices, import costs, and currency movements.
On September 24, the central government scrapped the 10% basic customs duty on crude sunflower oil and reduced the duty on crude soybean and crude palm oil to 5%. The corresponding duty on refined oils was also lowered, while the 19.25 percentage-point differential between crude and refined oils was retained.
On the pulses front, tur and urad prices have climbed nearly 8% each over the past year. Tur now stands at ₹125.18 a kilogram, up from ₹116.12 a year ago, while urad is at ₹122.89 versus ₹113.95. Chana, moong, and masur have seen much smaller increases, government data showed.
Rice prices are up 7.6% year on year at ₹46.43 a kilogram, with wholesale prices rising almost 8%.
Sharma said rice output could be lower this Kharif season due to weather risks, reduced acreage, and weaker yields, but substantial government stocks provide a buffer.
The government has kept imports of tur and urad in the 'free' category until March 31, 2027, and is procuring pulses under its price-support programme to strengthen domestic supply.
Sugar has recorded one of the sharpest annual increases in the kitchen basket, with the retail price at ₹56.70 a kilogram, up 22% from ₹46.46 a year ago.
To curb hoarding and speculative trading, the Centre has cut the stockholding limit for sugar dealers from 4,000 quintals to 2,000 quintals until November 30, while monitoring stocks at mills, dealers, and traders.
Sharma expects sugar prices to remain firm in the near term before easing as the sugarcane harvest peaks from October to November.
The latest data does not point to a uniform rise across the entire food basket. Potato prices are down nearly 10% from a year ago, tomatoes are marginally cheaper, and moong and masur prices have barely moved.
'The real red flag would be if the price pressure starts broadening across the staples basket and remains elevated for several months,' Arora said. 'For now, I would describe the situation as a food-price uptick that warrants monitoring, rather than a broad-based inflation resurgence.'
Source: Hindustan Times