Limited Fluctuations Expected in Food Inflation Next Year

29-Dec-2025 08:15 PM

New Delhi. Food inflation in India declined during the final months of 2025, but limited fluctuations are expected in 2026. Record production of rice and wheat is anticipated in the 2025-26 season, and the government has sufficient stocks available.

Sowing of Rabi crops has been good, and their condition is reported to be satisfactory. This is expected to keep domestic market prices of grains and pulses largely stable.

It is noteworthy that the food inflation rate surged to double digits in October 2024, but subsequently, prices of various food products started to decline, and the retail food inflation rate has remained in negative territory for the past six months.

Excellent domestic production of some commodities and substantial imports of others have significantly eased the supply situation in the domestic market, leading to a softening of prices.

Given the good condition of Rabi crops and high government stocks, a limited increase in the food inflation rate is expected in 2026.

Experts say that the food inflation rate, which was quite high in 2024, came down in 2025.  Normal fluctuations are expected in 2026.

During the first half of next year (January-June 2026), no significant change in the food inflation rate is expected, but the inflation rate in the second half may be determined by the performance of the southwest monsoon.

The La Niña weather cycle is expected to end globally in February 2026, and if the southwest monsoon is affected for any reason, prices of many agricultural products could firm up towards the end of the year.

However, the condition of Rabi crops is good, and the demand-supply equation appears balanced. In October 2024, food inflation had surged to a high of 10.87 percent,

but it steadily declined to (-) 3.9 percent by November 2025. This decline was driven by a fall in the prices of cereals, pulses, vegetables, and spices, among other items.