Crisil says food costs downturn in August due to tomato, broiler chicken prices

New Delhi: Rating agency CRISIL said in a report released on Friday that the price of home-cooked food or thali declined in August due to low prices of tomatoes and broiler chicken.
Vegetarian food prices fell 8% year-on-year (YoY) and 4% month-on-month (MoM) to ₹31.20 in August, while non-vegetarian food prices fell 12% year-on-year and 3% YoY. A sharp decline was observed. , As per the report, MoM has reduced the cost to ₹59.30.
In comparison, in August last year, the price of a vegetarian thali was ₹34 and that of a non-vegetarian thali was ₹67.50. By July 2024, the prices had already reduced to ₹32.60 for a vegetarian and ₹61.40 for a non-vegetarian thali.
A typical vegetarian meal includes roti, vegetables (onion, tomato, potato), rice, dal, curd and salad. In the non-vegetarian version, broiler chicken is used instead of lentils. Despite fluctuations in commodity prices, the ratio of ingredients used to calculate these prices remains constant.
The average cost of preparing food at home is calculated based on input prices prevailing in North, South, East and West India. Monthly changes in thali prices measure the impact of food inflation on household expenditure.
Vegetable prices showed a mixed trend in August. Onion and potato prices rose 51% and 53% respectively year-on-year due to lower arrivals, while tomato prices fell 51% to ₹52 per kg due to fresh supplies.
The fall in tomato prices is largely attributed to government intervention. On 29 July, the government started selling subsidized tomatoes, capped retail prices at ₹60 per kg after an earlier increase.
Pushan Sharma, director-research, CRISIL Market Intelligence & Analytics, said, “The decline in cost of vegetarian thali is mainly due to tomato prices, which is expected to decline further with fresh supplies coming into the market from western and southern states. “
Falling fuel costs also played an important role in reducing thali prices, the report said. The price of a 14.2 kg LPG cylinder in Delhi fell to ₹803 in March 2024, a significant decline of 27% from ₹1,103 in August 2023, helping reduce household food costs.
Additionally, prices of essential commodities like vegetable oil, chilli and cumin – although making up a small portion of food costs – fell by 6%, 30% and 58% respectively, according to the report.
For non-vegetarian food, lower prices of broiler chicken were a major factor in the price decline. Broiler prices declined 1-3% month-on-month, partly due to reduced demand during the Shravan month, when non-vegetarian consumption typically declines.