This inflation is all lemons and mangoes: Prices of only 60 items drop even as CPI declines to 59-month low

Inflation in major categories is still high with prices rising over the previous month

Consumer inflation declined to a 59-month low of 3.5 percent in July, compared with 5.1 percent in the previous month. However, only very few items saw lower prices in July.

Vegetable and food prices were up. The only categories in the vegatable basket with a significant weight that witnessed deflation were lemon (10.5 percent), and mango (0.3 percent).

A Moneycontrol analysis shows that of the 299 items tracked by the ministry of statistics and programme implementation to compute the  consumer price index (CPI), which forms the basis of the consumer basket, only 60 items saw lower prices in July.

A favourable base—inflation was a high 7.4 percent in July 2023—has helped bring the headline number down. Given the high base from previous year, the fall in overall inflation print to 3.5 percent from 5.1 percent in June looks significant. Prices for most commodities were rising in July.

In fact, prices climbed 1.4 percent from June.

Food prices were even higher at 2.8 percent. Moreover, those categories in which prices declined had a smaller share of the consumer basket.

For instance, in July, the 60 items witnessing a sequential deflation had a combined weight of 11.2 percent—lowest in a year—compared with 15.1 percent in the previous month and over 20 percent in May and April.

In March, a quarter of the consumer price basket had seen deflation. Overall, prices didn't changed in March, compared with the previous month.

Ups and downs

The weight of items with over a 1 percent jump in prices in July over the previous month was 16.6 percent, the highest in 12 months. It rose from 14.9 percent in June.

Among the categories with highest month-on-month jump in prices were tomatoes (41.8 percent), peas (31.8 percent) and cauliflower (23.5 percent) .

Prices of vegetables, as a category, went up 14 percent over the previous month.

Telephone charges were up 8 percent, owing to the hike in telecom tariffs and coffee price was up 1.5 percent.

Tuition and other fees were up 1 percent.

On the other end of the spectrum, leechi prices were down 46 percent. Fruits have a 0.008 percent weight in the consumer basket. Guava was down 5.4 percent, with a 0.8 percent weight.

The only categories with a significant weight which witnessed deflation were lemon (10.5 percent) drop, and mango (0.3 percent).

If you are a vegetarian, the disinflation doesn’t mean much to you. Meat and fish products with a 3.6 percent weight of total basket witnessed a 1.6 percent decline.