Meal costs fall in August led by tomato, broiler chicken prices, says Crisil

The cost of home cooked meals, or thali, fell in August led by lower prices of tomatoes and broiler chicken, rating agency Crisil said in a report released on Friday.

The price of a vegetarian meal dropped 8% year-on-year (YoY) and 4% month-on-month (MoM) to ₹31.20 in August, while non-vegetarian meals saw a sharper decline of 12% YoY and 3% MoM, bringing the cost down to ₹59.30, according to the report.

In comparison, in August last year, a vegetarian thali cost ₹34 and a non-vegetarian thali was priced at ₹67.50. By July 2024, prices had already eased to ₹32.60 for vegetarian and ₹61.40 for non-vegetarian thalis.

A typical vegetarian meal includes roti, vegetables (onion, tomato, potato), rice, dal, curd, and salad. The non-vegetarian version replaces dal with broiler chicken. Despite fluctuating commodity prices, the proportion of ingredients used to calculate these prices remains constant.

The average cost of preparing a meal at home is calculated based on input prices prevailing across north, south, east, and west India. The monthly change in thali prices serves as a measure of the impact of food inflation on household expenditure.

Vegetable prices displayed mixed trends in August. Onion and potato prices surged by 51% and 53% YoY, respectively, due to reduced arrivals, while tomato prices dropped 51% to ₹52 per kg thanks to fresh supplies.

The drop in tomato prices is largely credited to government intervention. On 29 July, the government launched the sale of subsidized tomatoes that capped retail prices at ₹60 per kg, following a surge earlier.

“The decline in vegetarian thali cost is largely due to tomato prices, which are expected to decline further with fresh supplies from western and southern states coming into the market,” said Pushan Sharma, director- research, Crisil Market Intelligence and Analytics.

Falling fuel costs also played a key role in reducing thali prices, the report highlighted. The price of a 14.2 kg LPG cylinder in Delhi dropped to ₹803 in March 2024, a significant 27% decline from ₹1,103 in August 2023, helping ease household meal costs.

Additionally, prices of essential commodities like vegetable oil, chili, and cumin—though making up a smaller share of a meal cost—fell by 6%, 30%, and 58% YoY, respectively, according to the report.

For non-vegetarian meals, lower broiler chicken prices were a major factor in the price decline. Broiler prices dropped 1-3% on month, partly due to decreased demand during the Shravan month, when non-vegetarian consumption typically declines.

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A rise in onion and potato prices tempered further cost reductions, Crisil said. 

“Potato prices are expected to stay firm due to low production caused by late blight infestations in major producing states like Gujarat, Punjab, Haryana, and Uttar Pradesh,” Sharma added.

Onion prices are expected to rise further in the near term, driven by the upcoming festival season and tight rabi supplies until kharif stocks arrive in the markets, he added.

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Meanwhile, India’s retail inflation, measured by the Consumer Price Index (CPI), rose by 3.54% in July, its lowest level in nearly five years, according to government data.