Thalinomics
1. What caused the surge in the cost of preparing a vegetarian thali in July 2023?
The cost of preparing a vegetarian thali at home increased by 28% in July 2023 compared to the previous month. This surge was primarily due to the significant jump in prices of vegetables and spices, particularly tomatoes, onions, and potatoes. The rising prices of these essential ingredients contributed to the higher overall cost of the thali.
2. How much did the cost of a vegetable thali rise in July 2023?
In July 2023, the cost of a vegetable thali rose to ₹33.7 from ₹26.3 in June, marking a substantial increase. This surge in cost was driven by the escalating prices of key vegetables and spices used in the thali.
3. What was the reason for the increase in the cost of a non-vegetarian thali in July 2023?
While the cost of a non-vegetarian thali also increased, it did so at a relatively moderate rate of 11% in July 2023 compared to the previous month. This increase was influenced by various factors, including changes in the prices of ingredients used in non-vegetarian thalis.
4. What is the significance of tomato prices in the rise of thali costs?
Tomato prices played a significant role in driving up the cost of thalis. The skyrocketing prices of tomatoes contributed to a quarter of the increase in the cost of a vegetarian thali. In July 2023, tomato prices more than tripled to ₹110 per kilogram from ₹33 in June, resulting in a substantial impact on overall thali costs.
5. How did the Reserve Bank of India (RBI) view the spike in tomato prices?
The RBI expressed "major concern" over the spike in tomato prices in its July bulletin. The central bank highlighted that tomato prices historically contribute to volatility in overall inflation and affect the prices of other vegetables in both retail and wholesale markets. The RBI emphasized that the unhinging of inflation expectations remained a significant concern.
6. How did other vegetables contribute to the increase in thali costs?
Apart from tomatoes, prices of other vegetables such as onions and potatoes also witnessed a notable increase in July 2023. Onion prices rose by 16%, while potato prices shot up by 9% compared to the preceding month. These increases further added to the overall cost of preparing thalis.
7. What is the outlook for onion prices in the coming months?
Onion prices are expected to rise significantly to ₹60-70 per kilogram in the retail market starting from early September. This increase is attributed to a likely shortfall in onion supplies, leading to a lean season and tightened supplies in the market.
8. How did higher chilli and cumin prices impact thali costs?
The prices of ingredients like chilli and cumin also contributed to the rise in thali costs. Chilli prices increased by 69% in July, while cumin prices jumped by 16%. Despite these increases, the contribution of these ingredients to the overall cost of thalis remained lower due to their lower quantities used in the preparation.
9. How did changes in broiler prices affect the cost of a non-vegetarian thali?
The cost of a non-vegetarian thali experienced a slower pace of increase due to factors such as the price of broilers, which comprise more than 50% of the cost. In July, the price of broilers likely declined by 3-5% on a monthly basis, contributing to the relatively moderate increase in the cost of non-vegetarian thalis.
10. How did vegetable oil prices impact the increase in thali costs?
There was a 2% monthly decline in the price of vegetable oil, providing some relief from the overall increase in the cost of both vegetarian and non-vegetarian thalis. This decline in vegetable oil prices helped offset a portion of the rising thali costs.
Thalinomics: Understanding Food Price Trends through the Thali Index
What is Thalinomics?
Thalinomics is a term coined in the Economic Survey 2020 to describe the study of food price trends and their impact on common people's budgets, particularly focusing on the affordability of a basic meal. The term is derived from "thali," which refers to a traditional Indian meal comprising various dishes served on a platter.
Thali Index:
The Thali Index is a concept within Thalinomics that measures the cost of a standard vegetarian thali over time. It serves as an indicator of the affordability of a basic meal for an average person. The Thali Index takes into account the prices of key ingredients like cereals, vegetables, pulses, and spices that constitute a typical Indian meal.
Significance:
Thalinomics and the Thali Index help policymakers and economists gauge the impact of inflation and food price changes on the general population. It provides insights into the fluctuations in food prices and their effects on household budgets, especially for low-income households that spend a significant portion of their income on food.
Methodology:
The Thali Index calculates the cost of a vegetarian thali by considering the prevailing prices of essential food items. The cost of the thali is tracked over time, allowing for a comparison of changes in food prices and their impact on affordability.
Insights:
Thalinomics and the Thali Index offer insights into how inflation, supply chain disruptions, and other factors influence food prices. By analyzing these trends, policymakers can make informed decisions to address food affordability and implement measures to mitigate the impact of rising prices on vulnerable populations.
Public Awareness:
The concept of Thalinomics and the Thali Index also raise public awareness about the fluctuations in food prices and their economic implications. It facilitates discussions about the cost of living and affordability, promoting transparency and accountability in managing food inflation.
Conclusion:
Thalinomics, through the Thali Index, provides a practical approach to understanding food price trends and their effects on the common people. By analyzing the affordability of a basic meal, policymakers can work towards ensuring food security and addressing the challenges posed by rising food prices in various economies.
