Thali cost increases in Nov as festival demand pushes up vegetable prices

06 Dec 2023, 14:40 by Puja Das · Mint Business News - Official Channel · Join

The cost of home-cooked vegetarian and non- vegetarian thalis increased significantly in November as festival demand pushed up vegetable prices and due to lower output in the kharif season amid erratic rainfall conditions.

While the cost of a veg thali rose 10% on month to ₹30.3 in November, non-veg thali cost went up 5% month-on-month to ₹61.2. There has been a 9% on year rise in the cost of veg thali, which is driven by a 93% and 15% increase in onion and tomato prices, respectively. Prices of pulses also shot up 21% year-on-year. However, the cost of a non-veg thali remained unchanged year-on-year, revealed rating agency CRISIL.

The veg thali comprises roti, vegetables (onion, tomato and potato), rice, dal, curd and salad. The non-veg thali has the same elements as the veg thali, except dal is replaced by chicken (broiler).

Onion and tomato prices recorded 58% and 35% month-on-month increases, respectively in November. Meanwhile, the cost of the nonveg thali increased at a slower pace than that of the veg thali because of a marginal 1-3% decline in prices of broilers, which account for 50% of the non-veg thali cost.

Onion, tomato and pulses are fundamental ingredients of an Indian thali and have a meaningful bearing on the daily expenses of a common person in India. These commodities have seen a jump in prices in the past few weeks, impacting the common person’s budget.

The average cost of preparing a thali at home is calculated based on input prices prevailing in north, south, east and west India. The data also reveals the ingredients (cereals, pulses, broilers, vegetables, spices, edible oil and cooking gas) driving the change in the cost of the thali.

“In the case of onions, the prevailing supply crunch in the market owing to the early depletion of stocks from the 2022-23 rabi season and estimated lower output from kharif 2023, coupled with the festive demand resulted in a synergistic impact on onion prices leading to the rise," said Pushan Sharma, Director - Research, CRISIL Market Intelligence and Analytics.

“Additionally, the unseasonal rainfall last month in Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh is estimated to have caused significant damage to the standing crop of late kharif onion which is expected to further tighten the onion supply in the market. The prices are expected to remain firm until the arrival of rabi onions from February," Sharma added.

As far as tomato is concerned, lower acreage under the 2022-23 rabi season and unseasonal rainfall in northern states, including Punjab, Haryana and Himachal led to an uptick in the retail prices on month in June (38%) and July (236%) this year.

However, the retail prices of tomato declined sequentially by an average of 30% between August and October owing to the arrival of the early kharif crop in the market. This price crash reportedly led to the uprooting of the late kharif crop varieties in a few regions of Andhra Pradesh and Karnataka, which tightened the overall Kharif supply of the commodity resulting in an uptick in tomato prices.

“Unseasonal rainfall in Maharashtra, Madhya Pradesh, and parts of Andhra Pradesh in November is expected to amplify the supply strain and keep the prices firm until the fresh arrivals come into the market by the end of December to mid-January," Sharma added.

The increase in retail prices of pulses by 21% can be attributed to the estimated lower pulse production in the country for the last two kharif seasons, leading to a tightened supply. The erratic monsoon during September 2022, led to crop damage, resulting in 7-8% lower kharif pulse output on year, stiffening the stock position.

Consecutively, in kharif 2023, lower acreage under pulse crops by 4-5% coupled with a decline in yields due to poor vegetable growth is estimated to have lowered the output by 7-8% over a low base of last year, further tightening the supply and causing a significant price rise, Sharma said, adding, “the prices are expected to remain elevated for the coming months compared to last year, due to the low stock position. However, the prices may experience moderation by March 2024, once the rabi arrivals come into the market."

CRISIL

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ABOUT THE AUTHOR

Puja Das
Puja Das is a New Delhi based policy reporter covering food, farm, fertiliser, water, and climate policies for Mint. Puja reports on farmers' distress and how the agriculture sector is impacting India's rural economy and policy initiatives to help meet the pledges made at COP27. Puja holds a post-graduation degree in Broadcast Journalism from the Indian Institute of Journalism & New Media, Bangalore.
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