Urban Food Index- Feb 20th Update
Our February 19 update of the India Urban Food Index shows a modest uptick to ₹929 (+0.4%), marking a pause after the recent sharp decline, even as volatility eased to 46.28 and affordability edged up to 1.40%. The increase was driven by a slight rise in tomato and chicken prices, alongside firmer prices in red lentils, while onion prices softened further and eggs extended their downward trajectory. Supply conditions remain supportive, with robust reservoir storage, steady market arrivals and adequate buffer stocks reinforcing overall supply visibility across key staples.
The latest configuration points to a food inflation setting that remains comfortable even as select items register price increases. While crude prices have moved higher amid geopolitical tensions and the rupee has weakened in recent sessions, domestic inflation remains low and policy settings unchanged. The Reserve Bank of India has maintained the repo rate, signalling continued caution as it assesses growth momentum, inflation dynamics under the revised data framework, and external developments. For policymakers, the durability of supply conditions and stability in external variables will shape the inflation path, while markets will look for clearer directional cues before reassessing the policy trajectory.