Drop in Tomato, Onion, and Potato Prices Bring Relief to Indian Kitchens; Inflation Expected to Ease Further
By R. Suryamurthy
Indian households saw welcome relief in May 2025 as the cost of home-cooked meals fell notably, thanks to a sharp drop in vegetable prices. According to Crisil’s latest “Roti Rice Rate” report, the average cost of both vegetarian and non-vegetarian thalis dropped by 6% year-on-year.
The standout contributors to this decline were the “TOP” trio—tomato, onion, and potato. Tomato prices plunged 29% to ₹23/kg (from ₹33 in May 2024), while onion and potato prices dropped by 15% and 16% respectively. These reversals follow last year’s steep spikes due to poor harvests and erratic weather.
However, the decline was partly offset by rising cooking costs, including a 19% rise in edible oil prices (due to higher import duties) and a 6% hike in LPG cylinder rates.
For non-vegetarian thalis, affordability improved even more as broiler chicken prices dropped 6% year-on-year, driven by oversupply and dampened demand following localized bird flu alerts in Maharashtra, Andhra Pradesh, Telangana, and Karnataka.
On a monthly basis, vegetarian thali costs remained stable in May, while non-vegetarian thalis saw a 2% dip. This was due to a further 4% fall in broiler prices, even as tomatoes and potatoes edged up slightly.
Crisil’s “Roti Rice Rate” tracks the cost of key thali ingredients like cereals, pulses, vegetables, oil, broiler, and LPG—providing insights into how inflation affects everyday food expenses.
BoB Predicts Inflation Below 3%
Economists at the Bank of Baroda (BoB) echo the optimism. They expect India’s headline CPI inflation to ease to 2.7% in May 2025, supported by food price moderation. BoB’s Essential Commodities Index (ECI) showed a 0.6% year-on-year fall in May—its steepest drop since January 2019.
Among food items:
- Masoor dal prices dropped for the 10th straight month.
- Arhar dal saw a sharp 18.9% year-on-year decline, aided by increased imports and good domestic production.
- Retail rice prices softened by 4.5%, and atta (wheat flour) saw a modest 2.5% decline.
Despite year-on-year improvement, some month-on-month price pressures are surfacing. Tomatoes saw a near 10% rise in May compared to April, while potato prices climbed 3%. Onion prices, though still falling, declined at a slower rate of 3.5% compared to 9.8% in April.
Outlook Hinges on Monsoon
BoB economists caution that the trajectory of “TOP” vegetables must be watched closely, particularly as the monsoon sets in. Several major producing states have received excess rainfall, raising the risk of supply-chain disruptions.
Yet, the short-term outlook remains favourable. Arrivals of key vegetables surged 26.4% year-on-year in May 2025, helping stabilize prices. The gap between wholesale and retail prices also indicates potential for further easing at consumer level.
Meanwhile, a dip in global gold prices (down 2.9% month-on-month) is expected to help temper core inflation.
Risks Ahead
Economists remain cautiously optimistic but advise watching out for metal price volatility (especially aluminum, copper, and zinc) and the effect of higher Minimum Support Prices (MSPs) on core inflation.
In the end, the Indian thali has become more pocket-friendly—but as always, the monsoon will play the key role in determining whether this trend continues or reverses.
