Tomatoes, potatoes, weddings and festival season keep thali prices up in December

Tomato and potato keep thali prices up

The cost of a vegetarian thali increased 6 percent over the previous year in December, as tomato and potato prices continued to pinch Indian households, according to a report released by rating agency Crisil on January 6.

The two vegetables, which account for 24 percent of the cost of a home-cooked meal, have been witnessing double-digit inflation.

Tomato prices were up 24 percent from the previous year at Rs 47 per kilogram, while potato prices were 50 percent higher compared with the previous year as production was likely 6 percent lower, according to Crisil.

“Adding to the cost was a 16% on-year jump in vegetable oil prices due to import-duty hike, coupled with higher demand during the festive and wedding seasons,” the rating agency further noted.

The prices of a non-vegetarian thali were also higher by 12 percent, as broiler prices, which account for 50 percent of the cost, increased by 20 percent.

“The sharp surge in broiler prices is attributable to a low base of last year when production was high,” Crisil noted.

While vegetable prices were higher year-on-year, sequentially, there was a decline in December, which also supported a 3 percent decline in cost of vegetarian

“Tomato prices fell 12% on-month, helped by fresh supplies from Madhya Pradesh, Maharashtra and Gujarat. A 2 percent and 12 percent on-month drop in potato and onion prices, respectively, further supported the price decline,” it said.

Falling food prices are an essential determinant of Reserve Bank of India’s action on interest rates.

The RBI’s Monetary Policy Committee held the policy rate at 6.5 percent for the eleventh consecutive time at its meeting in December, after inflation crossed 6 percent in October.

RBI also followed up with an increase in its FY25 outlook to 4.8 percent from 4.5 percent projected earlier.