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Surge in Prices of Key Staples Drives Up Cost of Vegetarian and Non-Vegetarian Thalis
Team Finance Saathi
06/Jan/2025
What's covered under the Article:
- Vegetarian thali cost rises 6% year-on-year in December, mainly due to higher vegetable prices.
- Non-vegetarian thali sees a 12% price hike, with broiler chicken costs being the main contributor.
- Month-on-month, vegetarian thali prices fall due to a drop in tomato, potato, and onion prices.
In a significant reflection of food inflation, the cost of a home-cooked vegetarian thali in India saw a 6% year-on-year rise in December 2024, reaching ₹31.60 from ₹29.70 a year ago. This price increase is primarily attributed to the sharp rise in vegetable prices, especially key staples like potatoes and tomatoes, which contribute significantly to the cost of a vegetarian meal. According to Crisil Ltd, the cost of vegetables, particularly potatoes and tomatoes, which account for 24% of the thali’s cost, was a major driver behind this inflation.
Vegetable Price Surge
The prices of tomatoes saw a 24% surge, increasing from ₹38 to ₹47 per kg in December, while potato prices soared by 50%, reaching ₹36 per kg compared to ₹24 a year ago. The sharp rise in potato prices was attributed to a 6% drop in production, which was impacted by late blight infestations in key states like Punjab, Uttar Pradesh, and Gujarat. These factors contributed significantly to the overall increase in the vegetarian thali price.
Moreover, vegetable oil prices also saw a 16% increase year-on-year, fueled by higher import duties and the seasonal demand surge during the festive and wedding seasons, which contributed to the rising food inflation. As a result, the cost of preparing a vegetarian thali has continued to rise, burdening households across the nation.
Non-Vegetarian Thali Price Hike
In a similar vein, the cost of a non-vegetarian thali increased by 12% year-on-year, reaching ₹63.30 from ₹56.40 last December. The increase in price was mainly driven by a 20% year-on-year rise in broiler chicken prices, which account for nearly 50% of the total cost of a non-vegetarian thali. The surge in chicken prices was attributed to a low base from last year, where production was high, and this year saw a combination of reduced supply and elevated feed costs, particularly during the festive season. These price increases have placed additional strain on consumers, particularly those who rely on non-vegetarian meals as a primary food source.
Monthly Cost Variation: December Relief for Vegetarians
On a monthly basis, there was some relief for vegetarian meals, as the cost of a vegetarian thali decreased by 3% from ₹32.70 in November to ₹31.60 in December. This reduction was largely due to a 12% drop in tomato prices as fresh supplies from Madhya Pradesh, Maharashtra, and Gujarat eased the supply constraints. Additionally, potato prices fell by 2% and onion prices saw a 12% decline, contributing to the lower overall cost.
However, for non-vegetarian meals, the situation remained grim, with the cost of a non-vegetarian thali rising 3% month-on-month from ₹61.50 in November to ₹63.30 in December. This increase was due to an 11% rise in broiler chicken prices, driven by reduced production amid a cold wave in northern India, along with higher seasonal demand during the festive period. These factors together resulted in higher food inflation for both vegetarian and non-vegetarian meals.
Fuel Prices Provide Relief
In contrast to the rising food costs, fuel prices presented a rare reprieve for consumers. The price of a 14.2 kg LPG cylinder in Delhi fell by 11% year-on-year, dropping to ₹803 from ₹903 in December 2023. This decline in LPG prices is an exception amidst the general trend of rising costs in other essential sectors like food and fuel.
Inflation and Impact on Household Spending
The ongoing rise in the cost of thalis serves as a direct indicator of the larger issue of food inflation impacting household budgets. According to the Consumer Price Index (CPI), retail inflation fell to 5.48% in November, a three-month low, down from 6.21% in October. Despite this drop, the rising thali costs clearly highlight how food inflation continues to burden consumers, with the average cost of preparing a meal acting as a critical barometer of consumer distress in India.
Conclusion
With food prices rising across the board, particularly for vegetables like tomatoes and potatoes, and the surge in broiler chicken prices, the impact on the cost of both vegetarian and non-vegetarian thalis is undeniable. While there has been some respite in the form of lower tomato and onion prices in recent months, overall food inflation remains a significant concern for Indian households. As the economy continues to grapple with these price hikes, the government’s handling of food inflation and policy adjustments will be critical to providing relief to the common man.