Fall in tomato, potato prices keep thali cost low in Oct, but Nov may see spike if onion costs more
Thali cost dropped in October, thanks to falling tomato and potato prices, but the trend may not continue in November if onions cost more. Crisil, in its latest report, expects prices to rise again in November, if onions, which account for 10% of thali, witness price increases.
Thali cost dropped in October, thanks to falling tomato and potato prices, but the trend may not continue in November if onions cost more. Crisil, in its latest report, expects prices to rise again in November, if onions, which account for 10% of thali, witness price increases.
A veg thali was priced at Rs 27.5 in October, whereas the cost of a non-veg thali was Rs 58.4. Tomato prices were 38% lower in October compared with a year ago period, whereas potato prices were down 21%. The cost of fuel was also down, as the government had decided to offer a subsidy on LPG cylinders. The price of an LPG cylinder has come down to Rs 903 from Rs 1,053 earlier.
Because of these factors, the cost of thali fell in October as falling tomato and potato prices helped make food more affordable, according to the report. The price of veg thali declined 5% compared with the previous year and 1% sequentially, whereas the prices of non-veg thali were at the lowest levels in over a year.
“The cost of non-veg thali declined faster as the price of broiler (~50% share in the thali cost) softened an estimated 5-7% on-year on a high base,” said Crisil. A veg thali was priced at Rs 27.5 in October, whereas the cost of a non-veg thali was Rs 58.4
Tomato prices were 38% lower in October compared with a year ago period, whereas potato prices were down 21%. The cost of fuel was also down, as the government had decided to offer a subsidy on LPG cylinders. The price of an LPG cylinder has come down to Rs 903 from Rs 1,053 earlier.
However, Crisil expects prices to rise again in November, if onions, which account for 10% of thali, witness price increases. The prices of onions were 75% higher in the first week of November, compared with the previous month. In October, onion prices had prevented thali prices from falling further.
“Further decline in thali prices was capped by a rise in onion prices in the second half of the month to Rs 40/kg on average from Rs 34/kg in the first half, trading 25% higher on-year in the second half owing to a lower kharif output estimated in 2023,” it stated.
Food inflation has remained high despite core inflation falling in the previous months. Although retail inflation declined to 5% in September, compared with 6.8% in August, food inflation had remained elevated at 6.6%. Food inflation is unlikely to cool down significantly in October as well.
“Price of pulses, accounting for 9% share in the total cost of a veg thali, increased 19% on-year. This too kept the thali cost from falling further,” said Crisil.
