In addition to raising your power costs, extreme weather is driving up the cost of vegetables, which has been driving retail inflation for more than a year. Recent years have seen repeated spikes in vegetable prices due to increased intensity and recurrence of weather disruptions, according to a new Crisil analysis. It stated, "There is a need to mitigate climate risks' impact on vegetable production and prices as they mount."
Compared to their 15.5% share in the food index, vegetables accounted for over 30% of food inflation in FY24, according to Crisil. It stated, "While rising prices for onions and tomatoes made news in fiscal 2024, the price increase was not exclusive to these vegetables." For example, triple-digit inflation was seen in the prices of garlic and ginger, at 117.8% and 110.4%, respectively. There was also an increase in the price of other vegetables such as beans, parwal, and brinjal. It stated that there was extreme volatility in fiscal 2024, with a low of -7.9% in May 2023 and a high of 37.4% in July 2023.
The study, which was made public on Thursday, also stated that although the typical high volatility was present in fiscal 2024, there were other abnormalities that caused inflation to rise. Among these disruptions were insect assaults, unequal rainfall, and increased temperatures.
Consequently, the vegetable price index not only avoided the usual seasonal winter fall, but it also exceeded the previous year's seasonal increase. As a result, average vegetable inflation increased in fiscal 2024," the report stated.
Among the food and beverage sub-group, vegetables have the third-highest weight (6.04%) in the consumer price index based inflation basket (combined), after cereals (9.67%) and milk (6.61%). With 45.86% of CPI inflation, the food and beverage subgroup has the largest overall weight.
Vegetable inflation was 23.84% in March compared to 4.85% for the CPI. As a result, the food and beverage basket saw 7.68% inflation.
In addition to highlighting the possibility of inflation, the State of the Economy piece in the Reserve Bank of India's monthly bulletin also mentioned the possibility of sustained geopolitical tensions that might maintain the volatility of crude oil prices.
In its most recent report, "State of the Global Climate 2023," the World Meteorological Organization (WMO) issued a dire warning about global warming, stating that there is a good chance that 2024 will surpass the record-breaking heat of 2023 even as the world speeds toward a freshwater shortage crisis. As to the WMO study, there has been a concerning increase in extreme weather occurrences, which calls for a swift and coordinated reaction, as per the data provided by the Indian Meteorological Department (IMD).
