Food inflation stays negative for third month; oil, fruit prices still high

New Delhi: Retail food inflation stayed in the negative zone for the third straight month in August, as prices of vegetables, pulses, cereals, meat, eggs and spices continued to cool. According to government data, food inflation stood at (-)0.69% in August 2025, compared to (-)1.76% in July and (-)1.01% in June.

This means that, on average, food prices were lower in August 2025 than they were a year ago.

However, prices did rise slightly on a month-to-month basis, with the Consumer Food Price Index (CFPI) going up by 0.64% in August compared to July.

A year ago, in August 2024, food inflation was at 5.66%, highlighting the significant drop over the past year.

Why are food prices falling?

The drop is mainly because of sharp falls in vegetable and pulse prices.

Vegetables: Prices fell by 15.92% in August compared to the same month last year, though this was a smaller decline than in July, when prices were down by 21%.

Pulses: Prices dropped by 14.53%, thanks to expectations of strong harvests. This is in stark contrast to last year, when pulse inflation had soared over 100%.

Cereals also saw lower inflation, with overall prices up just 2.7%. Rice prices were nearly flat at 0.97% higher than last year, while wheat saw a price rise of 4.3%.

Edible oil and fruits still costly

Despite easing prices elsewhere, edible oil prices remained steep:

• Mustard oil was up by 24.18%
• Refined oil rose 23.46%
• Overall edible oil inflation stood at 21.24%

Experts say this is due to higher global prices and India’s heavy dependence on imports. The country imports around 58% of its edible oil needs.

Fruit prices also remained high, with inflation at 11.65% in August.

Heavy rains could impact future prices

Economists have raised concerns that excess rainfall and flooding in several parts of the country in late August and early September may affect crops and push prices up in the coming months.

While the kharif sowing season has gone well — with crops planted across 110.54 million hectares, more than last year — floods in Punjab, Rajasthan, and Telangana could hurt yields, especially in horticultural crops.

“This is something to keep a close eye on,” said Aditi Nayar, Chief Economist at ICRA, adding that output and prices could be affected.

Other categories: Some up, some down

• Meat and fish inflation was modest at 1.48%
• Chicken prices dropped 2.99%
• Egg prices rose by 3.12%
• Spices inflation stood at 3.24%, with jeera (cumin) prices down by 15%
• Arhar (pigeon pea) prices continued to fall sharply — down 29.35% in August, thanks to a bumper harvest

While the data shows that overall food prices have eased, especially compared to last year, experts warn that the situation could change if weather conditions affect harvests. For now, consumers are seeing some relief, but certain essentials like cooking oil and fruits remain expensive.