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India has exported more than 45,000 tonnes of <keyword id="50894" type="General" weightage="20" keywordseo="onion" source="Orion">onion</keyword> since the ban on outbound shipments was lifted early this month, a top government official said on Wednesday. These exports provided relief to farmers after curbs were imposed to keep domestic supplies steady ahead of general elections. The world's biggest vegetable exporter banned exports of the bulb last December and then extended it in March, after a rise in prices triggered by sluggish production. "Since the ban was lifted, more than 45,000 tonnes of onions have been exported, mostly to the Middle East and Bangladesh," Nidhi Khare, Secretary of the Consumer Affairs Ministry, told PTI. To keep <keyword id="20035406" type="General" weightage="20" keywordseo="onion-prices" source="keywords">onion prices</keyword> affordable during the election period, the government on May 4 lifted the ban but imposed a minimum export price (MEP) of USD 550 per tonne. Khare said the forecast of a good monsoon this year will ensure better sowing of kharif (summer) crops, including onion from June onwards. State-owned agencies have started procuring onions from the recent rabi (winter) harvest to build a targeted 5,00,000-tonne buffer stock for the current year, she added. The country's onion production is expected to fall 16 per cent from a year earlier to 25.47 million tonnes in the 2023-24 crop year due to lower output in key growing regions like Maharashtra, Karnataka and Andhra Pradesh, according to the Agriculture Ministry's first estimates.

India exports over 45,000 tonnes onion after lifting ban, brings relief to farmers

New Delhi, Dec 2 () The Centre on Monday asked state governments to crackdown on traders hoarding onions, create buffer stocks and distribute imported edible bulb at a reasonable rate in order to provide relief to common man from soaring prices.
 Cabinet Secretary Rajiv Gauba chaired a meeting of the Committee of Secretaries to review the issue of rising onion prices across the country, an official statement said.
 Onions are selling at a high price of Rs 75-100 per kg in major cities.
 In a video conference with the Chief Secretaries of 11 major onion producing states, Gauba was briefed about the various steps being taken by them to control onion prices.
 Chief Secretaries of Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Madhya Pradesh, Chattisgarh, Rajasthan, Uttar Pradesh and Haryana participated in the video conference.
 "The Cabinet Secretary directed the states that the overall availability of onions has to be beefed up, considering the temporary shortage, to stabilise the prices," the statement said.
 The Centre has already banned onion exports and decided to import 1.2 lakh tonnes of onions, besides imposing stock holding limit on traders.
 "The states were further directed to maintain considerable buffer stocks, impose stock limits on traders and to ensure strict action against hoarding," the statement said.
 Gauba said the central government has approved the import of 11,000 tonnes of onions to tide over the situation. The deliveries are expected from the last week of December. 
 This is in addition to import of 6,090 tonnes of onions from Egypt whose deliveries are expected from second week of December.
 "Cabinet Secretary directed the states to utilise their Food and Civil Supply Departments to procure and distribute onions at reasonable prices," the statement said.
 Secretaries of Ministry of Consumer Affairs, Ministry of Agriculture and Food &amp; Public Distribution also attended the meeting.
 On Sunday, sources had said that state-owned trading firm MMTC, which is importing onion on behalf of the Centre, has placed an order of 11,000 tonnes of edible bulb from Turkey.
 According to Consumer Affairs Ministry's data, onion's average selling price on Monday is Rs 80 per kg, while the maximum rate is Rs 140 per kg in Port Blair.
 Onion is being sold at Rs 76 per kg in the national capital, Rs 87 in Mumbai, Rs 90 per kg in Kolkata and Rs 80 per kg in Chennai. 
 The lowest price of Rs 40 per kg was reported from Jhansi in Madhya Pradesh, the data showed.
 The ministry monitors prices of 22 essential commodities based on the data collected from 109 market centres spread across the country.
 On November 19, Food and Consumer Affairs Minister Ram Vilas Paswan had said onion production in kharif and late-kharif seasons of 2019-20 is estimated to fall 26 per cent to 5.2 million tonnes.
 Onion is a seasonal crop with harvesting period of rabi (March to June), kharif (October to December) and late-kharif (January-March). During July to October, the supply in the market comes from stored onions from rabi (winter-sown) season.
 During 2019-20, there was a 3-4 weeks delay in sowing as well as decline in sown area of the kharif onion because of late arrival of monsoon, Paswan had said. 
 Further, untimely prolonged rains in major growing states of Karnataka, Maharashtra and Madhya Pradesh during the harvesting period caused damage to the standing crops in these regions.
 "It's not in our hand, the government is making maximum efforts but who can win from nature," he recently told reporters when asked by when onion prices will come down to reasonable level. MJH RVK

Centre asks states to act against onion hoarders, create buffer stocks

New Delhi, Dec 9 () The Centre on Monday further reduced the stock holding limit for onion to 2 tonnes from 5 tonnes for retail traders as part of efforts to check hoarding and boost domestic supply of the kitchen staple.
 In a statement, the Consumer Affairs Ministry directed the state governments to undertake anti-hoarding operation with immediate effect on retail traders.
 Last week, the ministry had reduced the stock holding limit for retailers to 5 tonnes from 10 tonnes while that on wholesalers to 25 tonnes from 50 tonnes as onion prices were ruling high up to Rs 150 per kg.
 With retail prices failing to cool down, the ministry has further reduced the stock limits on retailers to 2 tonnes from the existing level of 5 tonnes with immediate effect, the statement added.
 Retail onion prices have risen in the past two months due to short supply owing to fall in production of kharif (summer) crop after heavy rains.
 As per the ministry's data, maximum retail prices are ruling at Rs 165 per kg on Monday, while modal price was at Rs 100 per kg. In most cities, onions are quoted over Rs 100 per kg in retail markets, pinching hard on consumers' pocket.
 The government has taken several measures to improve the supply of onion across the country and check price rise. Besides banning export, the government is boosting the supply through various modes including through sale of buffer stock onions at a subsidised rates and imports.
 State-run MMTC has been asked to import about 1 lakh tonnes of onions and the agency has already contracted over 21,000 tonnes and the shipment is expected to arrive mid-January.
 Experts are of the view that onion prices will remain firm till the first week of January when the late kharif onions will start hitting the market. LUX MR
MR

Govt further caps stock limit on onion retailers to 2 tons to check hoarding

New Delhi, Nov 27 () With onion prices continuing to rule high at Rs 80-90 per kg, the government on Wednesday extended prohibitions on traders from the stocking of edible bulb across the country for an indefinite period.
Separately, Food and Consumer Affairs Minister Ram Vilas Paswan did not say by when prices of onion will normalise. "It's not in our hand, the government is making maximum efforts but who can win from nature," he told reporters when asked by when onion prices will come down to reasonable level.
Besides stock holding limit, he said, the Centre has banned exports of onion and importing 1.2 lakh tonnes to control prices. Onion prices are ruling at Rs 70-80 per kg in retail markets across major cities.
"Stockholding limit on retailers and wholesalers are being further extended until further orders," an official statement said.
The stock holding limit was imposed in September. At present, retailers can stock onion only up to 100 quintals and wholesale traders are allowed to keep up to 500 quintals.
The decision was taken at an inter-ministerial meeting, chaired by Consumer Affairs Secretary A K Srivastava, to monitor the price and availability of onions across the country.
The consumer affairs secretary has written to chief secretaries of all states asking them to suitably reduce the stock limits further in their states as per the availability and prices. They have been asked to strictly enforce these stock limits and send an action taken report on a weekly basis.
State-owned MMTC informed that the first shipment of onions from Egypt would arrive in the second week of December. The public sector trading firm has contracted imports of 6,090 tonnes of onions. It has floated a country-specific tender.
Expressing concern over the price rise, Paswan said the situation is being closely monitored by a team of five Union ministers chaired by Home Minister Amit Shah. Finance minister, agriculture minister and road transport minister are also members of the group of ministers.
The group of ministers has already held one meeting and another one will be held soon, he said.
On November 19, Paswan had said onion production in Kharif and late-Kharif seasons of 2019-20 is estimated to fall 26 per cent to 5.2 million tonnes due to a delayed monsoon and then excessive rains in key growing areas.
The buffer stock of 57,000 tonnes of onions has been liquidated and therefore the Centre decided to import.
Meanwhile, MMTC has been asked to work out modalities of transportation of sealed container of onions from Mumbai port directly to FHEL facility at Rai, Sonipat in Haryana.
Agriculture Ministry in consultation with National Horticulture Board will provide an assessment about shelf-life in cold storage facility of imported onions from Egypt. MMTC has informed that onions from Turkey/Holland can be stored for relatively longer periods as compared to those from Egypt given the respective climatic conditions. MJH MR

Govt extends stock holding limit on onion traders indefinitely to check price rise

New Delhi, Dec 6 () Showing no signs of cooling down, retail onion prices have continued to spiral, touching as high as Rs 165/kg on Friday even as the government grapples to boost the supplies through imports.
The government in Parliament informed that imported onions will arrive by January 20.
In most cities, onion was quoting above Rs 100/kg in the retail markets, while at Nashik in Maharashtra -- the key producing centre -- the rates were ruling at Rs 75/kg on Friday, as per the data maintained by the Consumer Affairs Ministry.
Retail onion prices were ruling high at Rs 165/kg in Panaji (Goa), Rs 160/kg in Mayabunder (Andaman) and Rs 150/kg in Thiruvananthapuram, Kozhikode, Thrissure and Wayanad in Kerala on Friday.
Onion was sold at Rs 140/kg in Kolkata, Chennai and some places in Kerala and Tamil Nadu, Rs 130/kg in Bhubaneshwar and Cuttack (Odisha), Rs 120/kg in Gurgoan (Haryana) and Meerut (Uttar Pradesh), and Rs 100/kg in most cities tracked by the ministry.
"There is no doubt onion prices are rising. The main reason for rise in price was damage to the onion crop due to rains. Much of onion has been damaged in Maharasthra, the key growing state. However, the government has supplied buffer stock and asked MMTC to import onions and it should arrive by January 20," Minister of State for Consumer Affairs Danve Raosaheb Dadarao said during Question Hour in the Rajya Sabha.
The government has approved import of up to 1.2 lakh tonnes of onions to check the ongoing price rise. State-owned MMTC has been directed to import up to 1 lakh tonne onions through global and country-specific import tenders, he said.
Onion are highly perishable commodity that is prone to weight and moisture loss, quality deterioration, sprouting, losses in grading and separation, he added.
On Thursday, a group of ministers head by Home Minister Amit Shah reviewed onion price situation and progress made in import of onions.
To boost supply and contain price rise, the government has contracted over 21,000 tonnes of imports through MMTC and the shipments are expected to arrive mid-January. The tender and fumigation norms have also been ease to facilitate early arrival of imported onions.
Among other measures, the government has already banned export of onion, imposed stock limits on traders and is also supplying buffer stock at a cheaper rate.
Traders and experts are of the view that onion prices will continue to remain firm till January when late kharif crop will start hitting the market.
The country had last imported 1,987 tonnes of onion way back in 2015-16 when price has shot up significantly. LUX BAL

Onion prices shoot up to Rs165/kg; govt says imported onions to arrive by Jan 20

New Delhi, Dec 5 () As onion prices continue to rule high at above Rs 100/kg in most cities, Home Minister Amit Shah on Thursday reviewed progress made in the import of key kitchen staple to boost domestic supplies and check spiralling prices.
 Commerce Minister Piyush Goyal and Agriculture Minister Narendra Singh Tomar were among the ministers who attended the meeting. Food and Consumer Affairs Minister Ram Vilas Paswan could not attend the meeting due to health reasons, officials said.
 Cabinet Secretary Rajeev Gauba, Advisor to Prime Minister P K Sinha and Consumer Affairs Secretary Avinash Srivastava were also present in the meeting, the officials added.
 The home minister reviewed the progress made in the decisions taken in the last meeting with respect to facilitating speedy import of onion that would help improve availability and cool prices.
 The consumer affairs secretary, who made a presentation on the onion price situation in the meeting, informed that state-run MMTC has contracted import of over 21,000 tonnes of onion from Egypt and Turkey and the shipments are expected to arrive by mid-January.
 The secretary said that tendering and fumigation norms have been eased to facilitate early arrival of the imported onions. MMTC has been directed to issue two country specifics tenders and one global tender for 5,000 tonnes each, the sources said.
 He also apprised that stock holding limits on retailers and wholesalers have been reduced further to 5 tonnes and 25 tonnes, respectively, to check hoarding. Already, onion exports have been banned and supplies are being improved through buffer stock as well, the sources added.
 Onion prices have been ruling high for past few weeks due to fall in production of the Kharif production due to unseasonal rainfall in the key growing states, including Maharashtra. LUX ACB MR

Amit Shah holds meet on onion prices

New Delhi, Nov 28 () Onion prices remain high across the major cities of the country as the average selling price ruled at Rs 70 per kg on Thursday while the maximum rate of Rs 110 per kg was recorded in Panaji, according to official data.
 The lowest price of Rs 38 per kg of the bulb was reported from Gwalior in Madhya Pradesh, the Consumer Affairs Ministry data showed.
 Among the four metros, onion is being sold at Rs 76 per kg in the national capital, Rs 92 in Mumbai, Rs 100 per kg in Kolkata and Rs 80 per kg in Chennai.
 The ministry monitors prices of 22 essential commodities (rice, wheat, atta, gram dal, tur (arhar) dal, urad dal , moong dal, masur dal, sugar, gur, groundnut oil, mustard oil, vanaspati, sunflower oil, soya oil, palm oil, tea, milk, potato, onion, tomato and salt) based on data collected from 109 market centres spread across the country.
 Interestingly, a pricey onion seems to be catching the attention of thieves as an employee of a vegetable vendor in Surat said that someone stole 250 kg of the bulb worth Rs 25,000 from their shop in the early hours of the day.
 On Wednesday, the government extended prohibitions on traders from the stocking of edible bulb across the country for an indefinite period.
 The stock holding limit was imposed in September. At present, retailers can stock onion only up to 100 quintals and wholesale traders are allowed to keep up to 500 quintals.
 Food and Consumer Affairs Minister Ram Vilas Paswan on Wednesday had asserted that the government was making maximum efforts to control prices.
 Besides stock holding limit, he said, the Centre has banned exports of onion and importing 1.2 lakh tonnes to control prices.
 State-owned MMTC has informed that the first shipment of onions from Egypt would arrive in the second week of December. The public sector trading firm has contracted imports of 6,090 tonnes of onions.
 Expressing concern over the price rise, Paswan had said the situation is being closely monitored by a team of five Union ministers chaired by Home Minister Amit Shah. Finance minister, agriculture minister and road transport minister are also members of the group of ministers.
 The group of ministers has already held one meeting and another one will be held soon, he said.
 On November 19, Paswan had said onion production in Kharif and late-Kharif seasons of 2019-20 is estimated to fall 26 per cent to 5.2 million tonnes due to a delayed monsoon and then excessive rains in key growing areas.
 The buffer stock of 57,000 tonnes of onions has been liquidated and therefore the Centre decided to import. MJH MJH MR
MR

Onion prices remain high, soar to Rs 110/kg in Panaji

New Delhi, Nov 20 () The Cabinet on Wednesday gave its approval to the Food Ministry's recent decision to import 1.2 lakh tonnes of onions in a bid to improve the domestic availability of the key kitchen staple and check prices.
 Finance Minister Nirmala Sitharaman informed about the decision at a media briefing after the Cabinet meeting.
 On November 16, Food and Consumer Affairs Minister Ram Vilas Paswan had announced that the government will import 1,00,000 tonnes of onions through state-run MMTC, which has already floated a tender for buying 4,000 tonnes of the commodity from the global market.
 The government is also facilitating private imports and also relaxed phytosanitary and fumigation norms till December.
 The move comes after the government's various efforts to boost the domestic availability failed to cool down the retail prices significantly. Retail prices of onions are continuing to rule above Rs 60/kg in the national capital and other consuming centres.
 Onion prices have come under pressure due to 26 per cent fall in the production to 52.06 lakh tonnes during the kharif output late-kharif seasons of 2019-20.
 The all-India average retail price of onion stood at Rs 60.38 per kg on November 15, compared with Rs 22.84 per kg on the same date last year.
 Besides easing norms for onion import, the government has taken several measures including ban on exports, stock limits on traders and sale of the commodity stored as buffer, at a subsidised rate. LUX NKD CS MKJ

Cabinet approves import of 1.2 lakh tonnes onion: FM

New Delhi, Dec 6 () Pinching hard on consumers' pockets, retail onion prices have surpassed the Rs 100 per kg mark in most cities across the country and in some places it is ruling at Rs 140/kg, as per the official data maintained by the Consumer Affairs Ministry.
 Onion prices have been ruling high for past few weeks due to fall in production of the Kharif crop following unseasonal rainfall in key growing states, including Maharashtra.
 The price of onion was ruling at around Rs 120/kg in Mumbai, Chennai and Kolkata, while it was around Rs 100/kg in Delhi on Friday, as per the ministry's latest data.
 The key kitchen staple was quoting high in the tier II and tier III cities as well.
 The average modal price of onion in the retail markets was ruling at Rs 110/kg, while the maximum rate was ruling at Rs 140 per kg at Port Blair on Friday, the data showed.
 To boost supply and contain price rise, the government has contracted over 21,000 tonnes of imports through state-run MMTC and the shipments are expected to arrive mid-January. The tender and fumigation norms have also been ease to facilitate early arrival of imported onions.
 Among other measures, the government has already banned export of onion, imposed stock limits on traders and is also supplying buffer stock at a cheaper rate.
 Traders and experts are of the view that onion prices will continue to remain firm till January when new late kharif crop will start hitting the market. LUX DRR

Retail onion prices touch Rs 140/kg mark in some cities

New Delhi, Dec 23 () The first batch of imported onion weighing 790 tonnes has reached India and some quantities are being distributed to Delhi and Andhra Pradesh at a landing cost of Rs 57-60/kg, a senior Consumer Affairs Ministry official said on Monday.
 An approximately 12,000-tonne of onion shipment is expected to arrive by end of December, he stated.
 State-run MMTC, which is importing the key kitchen staple on behalf of the government, has contracted 49,500 tonne of onion so far.
 Retail onion prices are ruling at an average Rs 100 per kg in major cities, but rates are as high as Rs 160 per kg in some parts of the country.
 "The two consignments comprising 290 tonne and 500 tonne each has already reached Mumbai. We are offering this onion at a landed cost of Rs 57-60/kg to state governments," the official told .
 Andhra Pradesh and Delhi governments have already placed their demands and have started lifting imported onions, he said.
 Onion has been imported from Turkey, Egypt and Afghanistan. More consignments are underway which should improve the domestic supplies, he added.
 Onion prices have shot up sharply due to estimated 25 per cent fall in kharif production of 2019-20 crop year (July-June) compared to the previous year because of late monsoon and eventual excess rains in the major producing states.
 Onion prices have failed to cool down despite several government measures in the last few weeks. The government has already banned export of onion, imposed stock limits on traders and is also supplying buffer stock at a cheaper rate.
 Traders and experts are of the view that onion prices will continue to remain firm till January when late kharif crop will start hitting the market.
 The country had last imported 1,987 tonnes of onion way back in 2015-16 when price has shot up significantly. LUX ANS
ANS

790 tonnes of imported onion reach India; some sent to AP, Delhi: Govt official

New Delhi, Dec 13 () Average onion prices across major cities have jumped five fold in the last one year to Rs 101.35 per kg as domestic production in Kharif and late-kharif seasons (summer-sown) is estimated to have declined by 22 per cent, the government said in Rajya Sabha on Friday.
 The prices have risen by 81 per cent in the last one month.
 In a written reply to Rajya Sabha, Minister of State for Food and Consumer Affairs Danve Raosaheb Dadarao informed that all-India daily average retail price stood at Rs 101.35 per kg on Tuesday (December 10) as against Rs 55.95 per kg a month-ago and Rs 19.69 per kg a year-ago.
 "The combined Kharif and late-Kharif production for 2019-20 is estimated at 54.73 lakh tonnes as against 69.91 lakh tonnes in 2018-19," he said,
 Onion is a seasonal crop with harvesting period of Rabi (March to June), Kharif (October to December) and late Kharif (January to March). In the intervening period (July to October), the market is fed by stored Rabi onions.
 As per Agriculture Ministry estimates, the storage of onion in 2017 and 2018 stood at 48.73 lakh tonnes and 50.05 Lakh tonnes, respectively.
 "During 2019-20, there was a three-four weeks delay in sowing as well as decline in sown area of the Kharif onion because of late arrival of monsoon. Further, untimely prolonged rains in the major growing States of Karnataka, Maharashtra and Madhya Pradesh during the harvesting period, i.e., September/October, caused damage to the standing crops in these regions.
 "All this adversely impacted production and quality of the Kharif crop. The rains during September/October also affected transportation of the crop from these regions to consuming areas. This led to limited availability of Kharif onion in the market and put pressure on its prices," Dadarao said.
 To boost domestic supply and control prices, the minister said several steps such as creation of onion buffer of about 57,373 tonnes during Rabi 2019, ban on exports since September 29, facilitation of import, imposition of stock limit on traders, approval for import on onion through MMTC and domestic procurement of onions from producing/surplus states by NAFED for supplies in deficit states. MJH ANS
ANS

Avg onion prices jump five fold to Rs 101 per kg compared to last year

New Delhi, Nov 19 () Private traders have placed orders for importing onions and at least 1,000 tonnes are expected by month end, which will help ease retail prices that is still ruling high at over Rs 60/kg, a senior government official said on Tuesday.
 The retail prices of onion had soared to Rs 100/kg a week back in the national capital, but the government's various intervention helped it to cool down a bit, but the rates are still ruling high at over Rs 60/kg in Delhi as well as other consuming areas of the country.
 "Private traders have informed the government that they have imported a small quantity of onion. Traders are expected to order further 1,000 tonnes for delivery by month-end and another lot for next month," a senior Consumer Affairs Ministry official told .
 The shipments will come smoothly as the government has liberalised phytosanitary and fumigation norms for import of onion till December-end, the official added.
 To improve domestic availability and contain price rise, the government is facilitating onion imports through private as well as public trading agencies. The government has decided to import 1 lakh tonnes of onion through state-run MMTC, which has already invited bids for import of 4,000 tonnes.
 Onion prices came under pressure due to 30-40 per cent estimated fall in the kharif (summer) output this year on account of floods and drought.
 Besides easing norms for import, the government has taken several measures including ban on exports, stock limits on traders and sale of the commodity stored as buffer, at a subsidised rate. LUX DRR

Pvt traders place onion import orders; 1,000 tonnes expected by month-end: Govt official

New Delhi: The ongoing volatility in the prices of key food items such as tomatoes, onions, and potatoes (collectively known as TOP) and pulses continues to pose significant challenges for the <keyword id="19913109" type="General" weightage="20" keywordseo="monetary-policy-committee" source="keywords">Monetary Policy Committee</keyword> (MPC) of the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="100" keywordseo="RBI" source="keywords">RBI</keyword>), highlights a report by <keyword id="19898108" type="General" weightage="20" keywordseo="SBI" source="keywords">SBI</keyword>. "Current volatility in prices of TOP and pulses continues to challenge the MPC, keeping the headline above target at 5.1 per cent in June 2024," said the report. The report highlighted that this instability in <keyword id="19960157" type="General" weightage="20" keywordseo="food-prices" source="keywords">food prices</keyword> has kept the headline Consumer Price Index (CPI) <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> above the targeted level, reaching 5.1 per cent in June 2024. While the inflationary pressures remain a concern, the report stated that there is hope on the horizon due to the currently above-normal <keyword id="19968257" type="General" weightage="20" keywordseo="monsoon" source="keywords">monsoon</keyword> and increased sowing activity, which are further supported by the potential onset of a La Nina event later in the year. "The currently above-normal monsoon and sowing, backed up by a potential La Nina event later, promise reprieve in later quarters," said the report. Importantly, the report added that it is now expected that the CPI will remain above the RBI's medium-term target of 4 per cent in all quarters up until the first quarter of FY26. This persistent overshoot highlights the ongoing inflationary pressures in the economy. "Notably, now the CPI is expected to be above RBI's target of 4 per cent in all quarters till Q1FY26," the report added. However, the report noted that the Monetary Policy Committee expects a moderation in inflation during the fourth quarter, which is anticipated to help keep the overall CPI projection for FY24 unchanged at 4.5 per cent. The SBI report also believes that the volatility in food prices, driven by uneven spatial and temporal distribution of monsoon rains, presents an upside risk to the current inflation projections. As a result, SBI maintains its CPI estimate for FY25 at 4.7 per cent year-on-year. In the latest MPC meeting on Wednesday, RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> said inflation will moderate from July onwards as the monsoon has improved and global food prices have shown signs of easing in July. Das said, "Global food prices showed signs of easing in the month of July after registering an increase since March 2024." A degree of relief in food inflation is expected from the pickup in southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta Das. Das added, "Assuming a normal monsoon and taking into account the 4.9 per cent inflation print, Q1 CPI inflation for the current financial year (2024-25) is projected at 4.5 per cent, with q2 at 4.4 per cent, Q3 at 4.7 per cent and Q4 at 4.3 per cent. CPI inflation for the first quarter of next financial year (Q1 2025-26) is projected at 4.4 per cent."

High food prices raise concerns but improved monsoon offers hope for RBI: SBI report

<ul><li>Food inflation was the major driver of June CPI which hit a three-month high.</li><li>Tomato price inflation was at 64%, onions at 8.1%, and potato at 10.5% on a sequential basis.</li><li>Retail prices of pulses reported double-digit growth for the third consecutive month.</li><li>On a sequential basis, wheat and rice inflation also picked pace in June. </li></ul>India’s <keyword id="513422" type="General" weightage="20" keywordseo="retail-inflation" source="Orion">retail inflation</keyword> is at a three-month high in June at 4.8%, but it may not have reached its peak yet. Many climate related factors have been playing havoc with food inflation, and with most of North India under floods and this will only add to the pinch on the pocket, economists have warned. “Nine states had inflation above the average while six had above 5% — UP, Uttarakhand, Rajasthan, Kerala, Bihar and Haryana. The recent floods and landslides in the North will tend to push up inflation further in these states on the food side — especially vegetables and fruits which can add another 0.2% to headline inflation,” said Madan Sabnavis, chief economist at Bank of Baroda. Food inflation is a heavyweight in consumer price inflation (CPI), and drove it up in June, even as core inflation cooled as compared to the last month. “Food inflation was the major driver for higher headline inflation print; up by 218 basis points month-on-month versus 67 basis points in the last month due to a 12% hike in vegetables prices,” said a report by Phillip Capital. Price shock: Grains join tomatoes Vegetable prices however are on top of everyone’s minds, and it could get worse as prices of tomatoes refuse to inch down. In June, its prices went up by 64%. But other key vegetables like onion were high too at 8.1%, and potato at 10.5% – on a sequential basis. A report by SBI Ecowrap says that the past 10 years data shows that tomato price increase alone did not influence the overall CPI inflation much — except when it is accompanied by substantial increase in price of potato and onion. “We believe if tomato price increase without any substantial change in potato and onion then average inflation in Q2 FY24 will come near 5.8% yoy but if the TOP (tomato, onion, potato) inflation increases, then CPI might come around 6% yoy in Q2 FY24. Accordingly, average CPI for FY24 will vary between 5.2-5.4%,” says SBI Ecowrap. Grains are not too far behind either. Cereal and pulses inflation remained elevated in June at 12.7% y-o-y and 10.5% y-o-y, respectively. Retail prices of pulses, especially that of tur dal, have risen 24% y-o-y in June, reporting double-digit growth for the third consecutive month. Moreover, the<a href="https://www.businessinsider.in/india/news/india-sows-more-millets-and-less-rice-this-kharif-season/articleshow/101642365.cms"> sowing in rice and pulses is lower this Kharif season</a> due to delayed monsoons, and that doesn’t bode well for their prices which too are seeing upward pressure. “On a sequential basis, wheat and rice inflation also picked pace in June. Looking ahead, the sale of wheat and rice from the government’s buffer stock via Open Market Sale Scheme (OMSS) auctions could help cool retail prices of rice, wheat and atta. However, with regards to rice prices, deficient monsoons in West Bengal, a key rice-producing state, could impact sowing, putting upward pressure on prices,” said a report by CareEdge. Milk inflation moderated in June to 8.6% as compared to 8.9%. But it continues to remain sticky above 8%, reeling from the impact of a continued demand-supply mismatch and high fodder costs. “Milk prices could remain higher in the coming months, if unabating cereal inflation keeps cattle feed expensive,” CareEdge says. WPI is comforting, say experts RBI insisted in the last two monetary policy committee meeting updates that its decision to hold key interest rates is a pause not a pivot. Most experts had been hoping that it would go for rate cuts in the second half of the year, but the inflation picture is <a href="https://www.businessinsider.in/finance/news/with-inflation-cooling-rbi-may-slash-interest-rates-by-50-bps-this-financial-year/articleshow/100531780.cms">putting cold water on their hopes</a>. “While food prices will create inflationary pressures in the upcoming months due to uneven distribution of monsoon and lower kharif sowing, RBI stance would not be solely contingent on seasonal food inflation,” said Phillip Capital. Even at 4.8%, inflation is within the tolerance band of RBI, which is 4-6%. “The RBI will keep a keen eye here and it is almost given that nothing will change in the policy next month. More caution will be expressed on the inflation front,” said Sabnavis. CareEdge however says that wholesale price inflation (WPI) has been contracting and that is offering some comfort. India’s WPI has been in a deflationary zone for the second month in a row in May, as prices contracted by 3.48%. “Deflation in WPI will have a lagged impact on CPI inflation going forward. Having said that, RBI would remain cautious and adopt a wait and watch mode. We reaffirm our view that RBI would maintain an extended pause in 2023,” said CareEdge.

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