Sugar up nearly 30%, cereal, milk and chicken prices also rising as inflation pressure builds

The burden of inflation on ordinary households is set to grow in the coming months. Prices of vegetables and cereals are already climbing, and everyday items such as milk, eggs and chicken are now becoming costlier too. Families will have to spend carefully while managing daily household expenses.

This year, natural disasters, deficient rain and El Nino have hit farming directly. Since the impact on agriculture is tied directly to inflation, pressure has built up on everything down to the supply of grain. Experts say quick relief from cereal inflation will now be difficult.

In September, retail cereal inflation rose to 7.74 per cent, while overall retail inflation stood at 5.54 per cent. According to experts, cereal inflation could go up to about 10 per cent between October and December 2026. The rising inflation may also put pressure on the Reserve Bank of India. Experts estimate that the central bank could raise interest rates by a further 50 to 75 basis points to keep prices under control.

Rain was below average in many parts of the country, and the effect is now visible in the sowing of the rabi season crop. In many areas of south and west India, including Maharashtra, farmers are not getting enough moisture in their fields and there is also a shortage of irrigation water. This has damaged crops. Farmers are finding it hard even to secure enough grain for their own needs for the year, let alone a harvest. For this reason, the country does not have enough stock to meet its annual grain requirement.

The weather could affect the sowing of crops such as wheat and gram. If the yield falls short of expectations, the availability of produce in the market will drop, and this is feared to add to price pressure. Prices of sugar, pulses, rice and onions are also rising.

Sugar production in the country is likely to fall short of domestic demand for the second year in a row. Sugar prices have risen by about 30 per cent over the past year. To make up the shortfall, the government has allowed duty-free import of 1 million tonnes of sugar. However, higher prices in the international market, the falling rupee and costlier freight are making imports more expensive. As a result, cereal inflation in the coming months will depend on the harvest of winter crops and the amount of rainfall.

The impact of cereal inflation is now also visible in protein items. Rising costs of animal feed, transport, packaging and energy have burdened the dairy and poultry industries. Feed such as maize and soybean used in poultry farming accounts for 60 to 70 per cent of the total cost of production. This is why chicken and egg prices are also rising. According to experts, chicken prices could rise further from January 2027.