The recent decline in retail inflation is making its way to food plates, with both vegetarian and non-vegetarian thalis (full meals) seeing a significant price drop in August this year compared to the same period last year and the previous month, according to CRISIL MI&A Research.
Annual Drop in Thali Costs
On an annual basis, the price of a home-cooked vegetarian thali decreased by 8%, while the cost of non-vegetarian thalis saw an even more significant decline of 12%. The primary factor behind the reduction in vegetarian thali costs was a dramatic 51% drop in tomato prices. In August 2024, tomatoes made up about 14% of the total cost of a vegetarian thali.
Impact of Tomato and LPG Price Reductions
Tomato prices fell from Rs 102 per kg in August 2023 to Rs 50 per kg in August 2024, thanks to fresh supplies from southern and western states. Additionally, a 27% decrease in LPG prices further contributed to the reduced cost of thalis. By March 2024, the price of a 14.2 kg LPG cylinder in Delhi had dropped to Rs 803, down from Rs 1,103 in August 2023.
Monthly Thali Cost Reductions
On a month-to-month basis, the price of a vegetarian thali dropped by 4%, while non-vegetarian thalis saw a 3% decrease. This reduction was largely driven by a 23% fall in tomato prices, which decreased from Rs 66 per kg in July 2024 to Rs 50 per kg in August 2024.
Factors Influencing Non-Vegetarian Thali Prices
The decline in non-vegetarian thali costs was mainly due to a 13% year-on-year drop in broiler chicken prices, which account for about 50% of the total cost. However, the decline was partially offset by rising onion and potato prices, which increased by Rs 15 per kg and Rs 13 per kg, respectively, due to lower arrivals from the rabi harvest.
Conclusion
While the reduction in thali prices is a positive outcome of softening inflation, the increase in certain staple costs like onions and potatoes has moderated the overall decline, particularly in non-vegetarian thalis.