Why in the News?

India is experiencing very low food inflation, with average food price inflation at 0.2% in 2025 and negative inflation during July-December 2025 (-2.7%), compared to 8.5% in 2023. This shift reflects a “Goldilocks” zone, where temperatures, rainfall, and crop output remain neither excessive nor deficient, ensuring steady supply. Despite El Niño concerns and global commodity volatility, this indicates a structural break from recent food inflation cycles.

Why is the current situation described as a “Goldilocks” phase?

1. Moderate Temperatures: Ensures crop stress remains limited, with all-India mean surface temperature in 2025 only 0.28°C above normal, compared to 0.65°C in 2024.
2. Rainfall Surplus: Supports soil moisture and sowing conditions across seasons without triggering flood-related crop losses.
3. Balanced Extremes: Prevents yield shocks associated with heatwaves, cold spells, or prolonged dry phases.

How did temperature moderation alter agricultural outcomes?

1. Rabi Season Stability: Strengthens grain filling and tuber development due to cooler night temperatures.
2. Winter Temperature Data: January-April 2025 temperatures remained near-normal, unlike early heat spikes seen in 2023.
3. Heatwave Absence: Limits premature ripening and yield compression in wheat and pulses.

What does crop output data reveal about rabi performance?

1. Wheat Productivity: Improves grain weight and yield formation due to extended cool periods.
2. Potato Output: Ensures tuberisation remains optimal; output projected at 161 million tonnes, up from 158.1 million tonnes in 2023-24.
3. Mustard Production: Rises from 86.5 lakh tonnes (2018-19) to 93.6 lakh tonnes, easing edible oil pressures.
4. Chana and Barley: Record higher yields due to favourable sowing-to-harvest climate continuity.

How do buffer stocks reinforce food price stability?

1. Central Pool Stocks: Provide supply-side insulation against market volatility.
2. Stock Levels (Jan 1, 2026):
   1. Wheat: 274.63 lakh tonnes (Norm: 138 lakh tonnes)
   2. Rice: 679.32 lakh tonnes (Norm: 76.1 lakh tonnes)
   3. Total: 953.95 lakh tonnes
3. Excess Over Norms: Enables price intervention without procurement stress.

Why has food inflation remained low despite demand recovery

1. Wholesale Potato Prices: Fall from ₹500-700/quintal to ₹200-300/quintal. (Less than half)
2. Retail Potato Prices: Decline to ₹15-18/kg, registering -18.5% YoY inflation in December.
3. Vegetable Basket: Benefits from synchronised harvests and low storage losses.
4. Demand-Supply Balance: Ensures consumption recovery does not translate into price escalation.

Why is resurgence of food inflation considered unlikely?

1. Climate Outlook: La Niña conditions reduce probability of temperature extremes.
2. Stock Cushion: Enables rapid market release during price spikes.
3. Crop Pipeline: Successive rabi and kharif buffers reduce seasonal gaps.
4. Exception Clause: Only a sudden extreme weather event could reverse the trend.

Conclusion

The current suppression of food inflation reflects a rare convergence of climatic moderation, agricultural productivity, and policy preparedness rather than transient demand weakness. While structurally beneficial, this equilibrium remains contingent on climate stability. Sustaining low food inflation will require adaptive agricultural planning, climate-resilient cropping, and prudent stock management, rather than reliance on favourable weather cycles alone.

PYQ Relevance

[UPSC 2024] What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.

Linkage: Questions on inflation have been recurrent in GS III, reflecting its centrality to economic stability and welfare outcomes. The article provides current, data-backed supply-side explanations, enabling candidates to enrich answers with contemporary evidence and analysis.

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