India's food inflation set to worsen as Russia-Ukraine crisis intensifies

Managing inflation a challenge

The Russia-Ukraine crisis has pushed up prices for almost all global commodities, but edible oils, wheat and grains, fertilisers, crude oil, and metals have been hit particularly hard. In India, retail and wholesale food inflation has been rising, with the most recent data available showing that WPI food was 10.33 per cent and CPI-food was 5.43 per cent as of January 2022.Going forward, the rising global prices of edible oils, grains, cotton, fertiliser, milk, sugar and other commodities will likely make the Centre’s inflation management highly challenging.

Prices of food items heading north

Among food items, the data shows that inflation in milk has risen from 2.73 per cent in January 2021 to 4.09 per cent in January 2022. While oils and fats have been in high double digits for most parts of the same period, rice and wheat prices have shown a rising trend over the past few months. Raw cotton prices have risen by almost 69 per cent between January 2021 and January 2022. Imported prices of urea, ammonia, phosphoric acid or finished DAP have increased sharply between April 2021 to January 2022. The war in Russia has pushed them all the more north apart from raising gas prices which are an important raw material in making fertilisers.