Global Rice News

Headline Inflation Decreases to 28.3% in July 2023

Inflation rates based on the Consumer Price Index (CPI) have decreased for the second consecutive month in July 2023. From the historic high of 38.0% in May 2023, headline inflation has dropped to 28.3% on a year-on-year basis. It is worth noting that inflation rates in neighboring countries during the same period were -0.3% in China, 7.4% in India, and 9.7% in Bangladesh.

Factors Influencing Food Inflation

During July 2023, CPI food inflation increased to 39.52% compared to the same period in July 2022. This surge in food inflation can be attributed to various factors including fuel price hikes, higher energy and utility costs, rupee devaluation, increased production costs, and higher prices of imported food items. Given the ongoing economic and political uncertainties in the country, it is expected that the prices of essential food and non-food items will remain high in the coming months. It is worth noting that in neighboring countries, China experienced -1.7% CPI food inflation, Bangladesh had 9.7%, and India had 11.5% in July 2023.

Increase in Prices of Staple Cereals

In July 2023, the prices of staple cereals saw an increase compared to June 2023. Wheat flour (subsidized) prices rose by 10.2%, wheat prices increased by 7.9%, wheat flour (Fine) prices went up by 4.8%, Basmati rice prices saw a 3.4% hike, and Irri-6 rice prices increased by 0.5%. These figures also indicate a significant increase from the same time a year ago, with wheat flour (subsidized) prices up by 107.9%, wheat prices increased by 67.8%, wheat flour (Fine) prices rose by 61.5%, Basmati rice prices saw a surge of 83.7%, and Irri-6 rice prices increased by 70.4%.

Fluctuations in Non-Cereal Food Prices

Certain non-cereal food prices also experienced fluctuations in July 2023 compared to the previous month. Sugar prices rose by 12.9% and pulse Mash prices increased by 3.2%. These figures also indicate significant year-on-year increases, with sugar prices up by 58.4% and pulse Mash prices increasing by 40.9%. On the other hand, prices decreased for pulses such as Moong (-4.9%), Masoor (-3.3%), and Gram (-3.2%), as well as for live chicken (-4.7%), ghee (-3.6%), and cooking oil (-1.4%) in July 2023 compared to the previous month.

Impact of 2022 Floods on Food Prices

In the aftermath of the July 2022 floods, certain food commodities experienced a substantial increase in prices in July 2023. For example, wheat flour prices rose by up to 179%, rice Irri increased by 133%, potatoes saw a hike of 118%, pulse Mash prices increased by 61%, and milk prices rose by 53%.

Conclusion

The decrease in headline inflation to 28.3% in July 2023 is a positive development; however, it should be noted that the prices of essential food and non-food items remain high due to various factors. It is essential for policymakers to address the economic and political uncertainties in order to stabilize prices and ensure affordable access to food for the population.

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