Spices inflation has remained above 22% since July, and economists said it could add another 0.6 percentage point to retail inflation between December and March as prices are unlikely to ease until the next harvest.
The category has only a 2.5% weight in the inflation basket, but they influence prices of many food products. “For spices, the weight is lower, but the higher prices feed into the costs of other food products such as sauces, packed foods, masalas, jams, confectionery, etc,” said Madan Sabnavis, chief economist at Bank of Baroda.
Agencies“Cumin (jeera), pepper and chilly have witnessed lower output; hence, it is a supply issue. We have to wait for the next crop to come in before prices ease,” he said. Acreage of some of the spices that are the key constituent of garam masala, such as black pepper and coriander, has decreased significantly. Lower production during the kharif season also had an impact. The new rabi crop arriving by March 2024 is unlikely to have much impact as higher domestic and export demand may keep inflation up beyond March 2024, experts said.
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Jeera, which has witnessed triple-digit inflation for the last five months, alone has a 0.37% weight in the inflation basket. Its prices rose 122.6% in November compared with the previous year.Sowing of turmeric during the kharif season dropped 15-18%, pushing the prices to ₹12,600 per quintal this year compared to ₹7,000 per quintal in the previous year. Turmeric and dry chillies both recorded 10.6% inflation in November. Biplab Sarma, spice analyst at agriculture research firm Agriwatch, said coriander acreage is down 30%, which is expected to push up prices.
