Vegetarian Food Price Trends

Context

Crisil’s monthly food cost assessment shows a surge in onion, tomato prices pushed up vegetarian plate costs from a year earlier, but a 2% sequential drop pushed the plate’s price to a 7-month low; non-vegetarian plate costs slid 9% year-on-year.

1: Dimension: Inflation Trends

Price Spikes in Vegetarian Food Items: In February, vegetarian food prices experienced a notable surge, with a 7% increase. This rise was primarily driven by significant spikes in onion and tomato prices.
Rise in Essential Commodities: Notably, onion prices soared by 29%, while tomato prices saw an even sharper increase of 38%. Additionally, staple items such as rice and pulses, which collectively constitute 21% of the cost of a typical vegetarian meal, also witnessed significant upticks of 14% and 20%, respectively.

2: Dimension: Factors Influencing Price Changes

Market Dynamics: The decrease in the cost of non-vegetarian meals, in contrast, can be attributed to a decline of approximately 20% in broiler prices compared to the previous fiscal year. Broiler prices play a significant role, constituting about half of the cost of a non-vegetarian meal.
Seasonal and Regional Influences: The sequential fluctuations in food plate costs highlight the impact of seasonal and regional factors. While vegetarian plate costs decreased by 2% from January levels, non-vegetarian plate costs saw a 4% increase. This disparity can be linked to factors such as lower broiler supply and the spread of bird flu in Andhra Pradesh, alongside rising demand ahead of Ramadan.

3: Dimension: Analysis and Outlook

Cost Mitigation Efforts: Despite the overall increase in food prices, there are instances of relief. For instance, the cost of the vegetarian meal eased from January levels due to declines in onion and potato prices. However, the prices of tomatoes and pulses remained relatively stable during this period.
- Implications for Household Budgets: The Crisil report's insights into the average cost of preparing a meal at home offer valuable insights for households across different regions of India. Understanding these trends can aid consumers in managing their budgets effectively amidst fluctuating food prices.