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Though spices have a minor weight in the inflation basket, their price hikes influence various food products. According to Madan Sabnavis, chief economist at Bank of Baroda, higher spice prices lead to items like sauces, packed foods, masalas, and confectionery getting costlier.
Experts cite a supply issue, particularly affecting cumin, pepper, and chilly due to lower output. Decreased acreage of spices essential for items like garam masala, along with lower production during the kharif season, has impacted the market.
Spices inflation
Experts are of the view that the new rabi crop by March 2024 might not significantly impact prices due to continued high domestic and export demand.
Specifically, jeera has seen a consistent triple-digit inflation, contributing 0.37% to the inflation basket. Prices of jeera have surged by as much as 122.6% in November, in comparison to last year.
Turmeric sowing dropped by 15-18%, pushing its prices up significantly compared to the previous year. Turmeric prices have increased to Rs 12,600 per quintal this year from Rs 7,000 per quintal in the previous year.
Both turmeric and dry chillies recorded a 10.6% inflation in November. A decrease in coriander acreage by 30% is expected to further drive up its prices.
India’s retail inflation escalated to 5.55 per cent in November from October’s four-month low of 4.87 per cent, according to data released by the Ministry of Statistics & Programme Implementation. This figure remains within the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent.
