A Reserve Bank of India (RBI) study has said vegetables, which hold a 6.04 per cent weightage in the Consumer Price Inflation (CPI) basket (with all food items combined accounting for 45.86 per cent of retail inflation), are particularly susceptible to price increases with rising temperatures.
The study, published in the RBI Bulletin for this month, advocates for the faster adoption of temperature-resistant crop varieties to mitigate this effect. Authored by Nishant Singh and Love Kumar Shandilya, the chapter on “Impact of Weather Anomalies on Vegetable Prices” reveals that “regression estimates indicate that one-unit increase in rainfall and temperature deviations add 0.07 and 2.60, respectively, to the CPI-Vegetables momentum, on average.”
The study underscores that vegetable prices exhibit significant volatility and are a major contributor to India’s food and headline inflation. This volatility is frequently exacerbated by supply-side disruptions, predominantly caused by weather shocks, necessitating vigilant tracking of evolving weather conditions.
