Thali costs rise in June led by vegetable, broiler chicken prices, says Crisil

June saw a notable increase in the cost of home-cooked meals, or thali, in India, driven by higher prices of vegetables and broiler chicken. This highlights the volatility in food prices, which could, in turn, impact household budgets.

The cost of a typical vegetarian meal surged to ₹29.4 per plate in June, marking a 6% increase from the previous month, according to rating agency Crisil. In contrast, the cost of a non-vegetarian meal rose more modestly to ₹58 per plate, reflecting a 4% sequential rise.

Year-on-year, the cost of a vegetarian meal increased by 10%, while the non-vegetarian meal became 4% cheaper.

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A typical vegetarian meal includes roti, vegetables (onion, tomato, potato), rice, dal, curd, and salad. The non-vegetarian version replaces dal with broiler chicken. Despite fluctuating commodity prices, the proportion of ingredients used to calculate these prices remains constant.

The average cost of preparing a meal at home is calculated based on input prices prevailing across north, south, east, and west India. The monthly change in thali prices serves as a measure of the impact of food inflation on household expenditure.

Crisil attributed the increase in vegetarian thali costs to a sharp rise in vegetable prices, with potato, onion, and tomato prices increasing by 9%, 15%, and 29%, respectively, due to lower arrivals caused by adverse weather conditions. Year-on-year, the cost of the vegetarian thali rose significantly, driven by a surge in the prices of tomatoes (30%), onions (46%), and potatoes (59%), largely due to a low base from the previous fiscal year.

Vegetarian thali costs

"The cost of the home-cooked vegetarian thali has been on the rise since November 2023 due to rising prices of vegetables. Tomatoes, onions and potatoes have been the key contributors to this rise as adverse weather conditions have impacted their supply,” said Pushan Sharma, director, research, Crisil Market Intelligence and Analytics.

The surge in prices of tomatoes, onions, and potatoes is attributed to lower onion arrivals due to a significant drop in rabi acreage, reduced potato yields from unseasonal rainfall in March, and a virus infestation in the tomato summer crop in key growing regions of Karnataka and Andhra Pradesh, which led to a 35% year-over-year decline in tomato arrivals.

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Additionally, a dip in acreage and subdued arrivals resulted in a 13% year-over-year increase in rice prices, which accounts for 13% of the vegetarian thali cost. A dry spell during key kharif months impacted pulse production, contributing to a 22% year-over-year increase in their prices, accounting for 9% of the vegetarian thali cost.

Non-vegetarian meal dynamics

In contrast, the increase in the cost of the non-vegetarian thali was tempered by an estimated 14% year-over-year decline in broiler prices, driven by a high base from the previous fiscal year, an oversupply situation, and lower feed costs. The month-on-month rise in non-vegetarian thali costs was due to elevated vegetable prices, partially offset by a modest 1% sequential increase in broiler prices, which constitute 50% of the non-vegetarian thali cost.

“Going forward, thali prices are expected to be lower on year due to the high base of last fiscal, when tomato prices had surged. Sequentially, though, tomato prices will rise before correcting at the end of August as fresh supplies arrive from southern and western states," Sharma said.

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India's retail food inflation slightly eased to 8.69% in May from 8.7% in April, down from 13.7% a year ago. Conversely, the rate of inflation based on the wholesale price food index increased to 7.4% in May from 5.52% in April, reflecting ongoing pressures in the food supply chain.