StatsGuru: The numbers behind food inflation

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Food inflation has been the bugbear of the Indian economy over the past few years. If the monsoon disappoints, it might only intensify. As Table 1 shows, the degree to which wholesale prices differ from retail prices; the amount of volatility; and recent movements in prices, all greatly differ across foodstuffs. Rice and wheat, for example have not seen very great movements in prices, and a small difference between retail and wholesale prices. But both show a very distinct uptick in prices recently.

In fact, the recent increase in prices is visible across the board. Onions, potatoes and tomatoes had all seen some volatility last year and then a month-long spell of relative stability. That seems to be changing. Milk has seen less volatility, but shares that recent upward movement.

The logic of vegetable prices is sometimes hard to follow. Consider Table 2. Tomatoes are less expensive retail than they were in January - but are more expensive wholesale than they were then. They are more expensive retail than they were a fortnight ago, by a large proportion - but less expensive retail, again by a sizeable margin. Pulses move in opposite directions frequently - gram dal is cheaper than it was, whereas masoor dal is more expensive. What sticks out, however, is the sharp increase in wholesale prices, regardless of the baseline, of potatoes and onions.