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Climate change

Climate Change Drives Food Inflation in India, Study Reveals

Strategic Insights

— 2 min read

Climate change is exacerbating food inflation in India by disrupting the production and supply of essential vegetables like tomatoes, onions, and potatoes (TOP). The severe heatwaves and erratic rainfall over the past five years have pushed up the prices of these staples, resulting in alarming levels of food inflation. According to a study by Climate Trends, a research consultancy, the Reserve Bank of India suggests that changes in rainfall and temperature increase vegetable inflation by 1.24 and 1.30 percentage points, respectively. The concentrated production of TOP vegetables in a few states makes their prices highly volatile.

Key Takeaways:

  • The study found that extreme weather events disrupt supply, damage crops in the field and storage, and worsen post-harvest losses, causing sharp price spikes in TOP vegetables.
  • Food inflation spiked in 2019-20 due to unseasonal and excessive rains, which damaged kharif onion crops in Maharashtra, Karnataka, and Madhya Pradesh, and rainfall and cyclone-induced potato crop losses in UP and West Bengal.
  • The rising trend of food inflation continued in 2020-21 amid pandemic disruptions and briefly moderated in 2021-22 but climbed again due to post-pandemic demand and the Russia-Ukraine war.
  • Erratic weather in 2023-24 triggered new supply shocks, especially in vegetables, keeping inflation high, with heavy rains in Himachal Pradesh and Karnataka causing a 10.9% and 12.9% production decline of tomatoes, respectively.
  • Unseasonal rain and hailstorms in Maharashtra led to a 28.5% production drop on onions in 2023, pushing prices up to Rs 39/kg in November 2023.
  • Unseasonal rain in West Bengal and frost in Uttar Pradesh reduced production of Potatoes by 7% in 2023-24, keeping prices elevated throughout 2024.
  • 2024 marked the hottest year on record, with heatwaves and erratic rains driving prices of all three vegetables above historical levels.
  • Consumer food price inflation peaked at 11.5% in July 2023 and 10.87% in October 2024, while vegetable inflation spiked to 37% in July 2023 and 42% in October 2024.
  • Small and marginal farmers, who dominate vegetable supply, face disproportionate losses due to lack of safeguards, storage, and transport infrastructure.

Statistics:

  • Changes in rainfall raise vegetable inflation by 1.24 percentage points.
  • Changes in temperature increase vegetable inflation by 1.30 percentage points.
  • Production decline of tomatoes in Himachal Pradesh and Karnataka: 10.9% and 12.9%, respectively.
  • Production drop on onions in Maharashtra: 28.5% in 2023.
  • Production decline of Potatoes in West Bengal and Uttar Pradesh: 7% in 2023-24.
  • Consumer food price inflation: 11.5% in July 2023 and 10.87% in October 2024.
  • Vegetable inflation: 37% in July 2023 and 42% in October 2024.

Sources:

  • Times of India
  • Reserve Bank of India
  • Climate Trends

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