Food inflation could soon fall to 6%, but there are still risks: Analysts.

In the next three to four months, scientists predict that favorable weather, above-normal monsoon rainfall, and improved rabi sowing will significantly reduce food inflation from its current levels.

They assert that the prices of grains and edible oils continue to be a cause for concern and represent a short-term upside risk to the inflation trajectory. CPI inflation may fall below 5% in Q4 of FY25 if the consumer food price index (CFPI), which has averaged 8.4% from April to December, continues to decline to about 6%.

The CPI inflation rate for FY25 may be 4.8–5%, or 30–50 basis points higher than the RBI’s prediction because analysts do not anticipate inflation to slow down much further from that level.

Due to low carry-over stock with both government and private organizations and an increase in the minimum support price, retail wheat inflation rose from 2.31% at the start of the year to 7.84% in December 2024. In contrast, rice inflation decreased to 7.44% in December 2024 from 8.19% in January 2024.

As of right now, more rabi tomatoes, onions, and potatoes have been sown than in the same period last year, according to an official Department of Consumer Affairs note.The overall area sown for other rabi crops, like wheat, pulses, and oilseeds, so far is 64 MHA, according to data from the agriculture ministry. This is in contrast to 63.74 MHA during the same period last year.

Rabi crop harvesting is anticipated to start by mid-March, according to officials, and crop prospects appear promising thus far. From an average retail price of Rs 40/kg for each a month ago, the modal retail prices of tomato, onion, and potato have now dropped to Rs 20/kg, Rs 30/kg, and Rs 20/kg, respectively, and officials anticipate further moderation.

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