Milk and Rice Prices Remain High Despite Falling CPI Inflation

Milk and rice inflation continued to remain high even as consumer price index (CPI) inflation fell for the fourth straight month in May to 4.25 per cent. From 7.04 per cent in May 2022, the CPI inflation has declined substantially as India’s central bank targets rate of 4 per cent. 

However, despite falling CPI inflation, Centre For Monitoring Indian Economy (CMIE) data suggests that prices of rice and milk continue to remain high. Rice inflation for the month of May stood at 11.33 per cent, a slight decline from April when the rate stood at 11.37 per cent. Rice inflation has remained in double digits since October 2022. 

For milk and products, the inflation rose from 8.85 per cent in April to 8.91 per cent in June. For the current month, CMIE predicts that this might cross 9 per cent. Rice inflation is also expected to remain at the same level with the possibility of minor dip, CMIE analysis added. 

Food group accounts for 40 per cent of CPI. Inflation eased for cereals and wheat in the month of May. According to the data, wheat inflation fell from 15.39 per cent in April to 12.61 per cent in May. Cereal and products inflation also eased from 13.67 per cent in April to 12.65 per cent in May. 

Overall, food group’s inflation fell to 2.91 per cent in May from 3.84 per cent recorded in April. CMIE analysis suggests that a fall is expected in data for June as well.