{"id":55968,"date":"2025-07-21T10:52:13","date_gmt":"2025-07-21T05:22:13","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=55968"},"modified":"2025-07-21T10:52:13","modified_gmt":"2025-07-21T05:22:13","slug":"why-food-inflation-is-likely-to-stay-low-in-india","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/why-food-inflation-is-likely-to-stay-low-in-india\/","title":{"rendered":"Why Food Inflation Is Likely to Stay Low in India"},"content":{"rendered":"<h2><b>Food Inflation in India Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s consumer price index inflation fell to 2.1% in June\u2014lower than the US (2.7%) and UK (3.6%). The gap was even more notable in food inflation, with India recording a decline of 1.1%, while the US and UK saw increases of 3% and 4.5%, respectively.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This marks the lowest retail and food inflation since January 2019 and is a significant relief for the Reserve Bank of India, which had struggled with high inflation through 2023\u20132024.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The turnaround was driven by a surplus monsoon in 2024, leading to bumper kharif and rabi harvests, easing food prices from early 2025.<\/span><\/li>\n<\/ul>\n<h2><b>Food Inflation in India<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Food inflation in India refers to the rate at which the prices of food items increase over a specific period, typically measured year-on-year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is a critical component of the Consumer Price Index (CPI), which tracks changes in the cost of living.<\/span><\/li>\n<\/ul>\n<h3><b>Key Features<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Measured by the Ministry of Statistics and Programme Implementation (MoSPI) through the CPI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Covers essential food items like cereals, pulses, vegetables, fruits, milk, eggs, meat, and edible oils.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Affects household budgets, particularly for lower- and middle-income groups where food is a major expense.<\/span><\/li>\n<\/ul>\n<h2><b>Wheat Stocks Rebound, Ensuring Cereal Stability<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Thanks to abundant rainfall during the 2024 monsoon season\u20147.6% above normal\u2014favourable soil moisture and improved water reserves led to a strong wheat harvest.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Wheat stocks in government godowns, which were critically low at 282.61 lakh tonnes (lt) on July 1 last year, have now risen to 358.78 lt\u2014a <\/span><b>four-year high<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Procurement also surged to 300.35 lt during the April\u2013June marketing season, up from 266.05 lt in 2024 and just 187.92 lt in 2022.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coupled with record-high rice stocks, this has placed India in a comfortable cereal supply position.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government now has ample reserves to support the public distribution system and intervene in the market to control prices\u2014unlike the situation just months ago.<\/span><\/li>\n<\/ul>\n<h2><b>Strong Monsoon, Shifting Crop Patterns, and Inflation Control<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The 2025 monsoon has brought much-needed relief, <\/span><b>arriving early over Kerala<\/b><span style=\"font-weight: 400;\"> on May 24 and delivering cumulative rainfall 7.1% above the long-period average (LPA) by July 20.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Most regions have received above-normal rain, boosting sowing in major kharif crops\u2014except arhar (pigeon pea), soyabean, and cotton.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Almost all states\/regions \u2013 <\/span><span style=\"font-weight: 400;\">barring Telangana, Andhra Pradesh, Bihar, eastern Uttar Pradesh, Marathwada, Assam, Meghalaya and Arunachal Pradesh<\/span><span style=\"font-weight: 400;\"> \u2013 have received above-par rains.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, these dips are due to low market prices and pest concerns, not inadequate rainfall.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Farmers are shifting acreage to maize, which is now more profitable due to its use in ethanol, feed, and starch industries.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite reduced planting in some pulses and oilseeds, food inflation is expected to remain under control, thanks to record imports.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">In 2024\u201325, India imported 72.56 lakh tonnes (lt) of pulses and 164.13 lt of vegetable oils.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government has extended zero-duty imports on key pulses till March 2026 and recently slashed duties on major edible oils, ensuring sufficient supply and price stability in the months ahead.<\/span><\/li>\n<\/ul>\n<h2><b>Fertiliser Shortage Poses Risk Despite Strong Monsoon Start<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While the 2025 monsoon has boosted early kharif sowing, concerns remain about its potential weakening and a growing fertiliser shortfall.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adequate rains have increased fertiliser demand, but opening stocks of key nutrients like urea and di-ammonium phosphate (DAP) as of July 1 are significantly lower than last year.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Urea stocks have fallen from 103 lakh tonnes (lt) to 61.22 lt, and DAP from 19.18 lt to 12.98 lt.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The decline is mainly due to reduced imports, especially from China, which imposed export restrictions<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Chinese exports of urea to India dropped from 21.48 lt to just 1.04 lt, and DAP from 22.87 lt to 8.43 lt.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This supply squeeze has driven up DAP prices from $525 to $810 per tonne.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It remains uncertain whether the fertiliser shortage will affect crop yields, but it adds a layer of risk to an otherwise promising agricultural season.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/explained-why-food-inflation-may-remain-low-10138792\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/www.reuters.com\/world\/india\/indias-retail-inflation-slows-210-june-2025-07-14\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">RT<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bumper harvests, strong monsoon, record imports, and cereal stockpiles are keeping food inflation in check across India in 2025.<\/p>\n","protected":false},"author":18,"featured_media":56000,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[1688,60,22,59],"class_list":{"0":"post-55968","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-food-inflation-in-india","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/55968","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=55968"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/55968\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/56000"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=55968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=55968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=55968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}