RBI Bulletin | Prices of cereals, pulses, edible oil moderates in August, shows high frequency food price data

By  Manish M. Suvarna

The prices of cereals, pulses, and edible oil have recorded a broad-based moderation in August, showed the high frequency food price data, Reserve Bank of India’s (RBI) latest monthly bulletin said on August 19.

“High frequency food price data for August so far (up to 12th) show that the price of cereals, pulses and edible oil recorded a broad-based moderation,” the bulletin said.

The bulletin further added that among key vegetables, potato prices continued to edge up, while onion and tomato prices declined.

The monthly State of the Economy article includes Deputy Governor Michael Patra – one of the three RBI representatives on the Monetary Policy Committee (MPC) – as one of its co-authors. The views expressed in the article do not reflect the central bank’s official stance, RBI said in a release.

Despite the moderation in headline inflation and overall food inflation, year-on-year inflation in cereal prices remains high at 8.1 per cent in July.

In order to address these price pressures, the government approved the sale of wheat and rice in the open market at Rs 2,325/quintal and Rs 2,800/quintal, respectively, from August 1, 2024.

Also, the government announced that the grain-deficient states can directly purchase rice from FCI at Rs 2.800/quintal under the open market sale scheme (OMSS) without participating in the e-auction (w.e.f. August 01, 2024).

Headline inflation, as measured by year-on-year changes in the all-India CPI, moderated sharply to 3.5 per cent in July 2024 from 5.1 per cent in June 2024. The 154 bps fall in inflation was on account of a favourable base effect of 2.9 per cent which more than offset a positive momentum of 1.4 per cent, bulletin said.

This article has been republished from The Moneycontrol.