India is facing a fresh food inflation warning as rising edible oil prices, global supply disruptions and weather risks threaten to put additional pressure on household budgets. Inflation is now expected to average around 5.1%, more than double last year's 2% level, with risks tilted to the upside.

Edible oil has emerged as a major pressure point, with packed sunflower oil prices rising around 18%, palm oil around 14%, soybean oil nearly 12%, groundnut oil over 9% and mustard oil more than 7%.

India imports more than half of the edible oil it consumes, making domestic prices highly sensitive to developments in global markets. The Russia-Ukraine war and disruptions in the Black Sea are adding further uncertainty, as Russia and Ukraine remain major suppliers of sunflower products and other agricultural commodities.

At the same time, El Niño-related weather risks could affect India's monsoon and reduce yields of oilseeds such as soybean, groundnut and mustard. While India's food-grain inventories remain relatively strong and rainfall has improved, rising energy and transport costs, global commodity pressures and weather uncertainty could keep food inflation elevated.

India Food Inflation Warning: Edible Oil Prices Surge, Black Sea War And El Niño Raise Household Cost Risks

India’s inflation outlook is facing fresh pressure as edible oil prices rise sharply, global supply risks grow and weather conditions threaten agricultural production.

Prices of packed sunflower oil have reportedly risen around 18%, while palm oil, soybean oil, groundnut oil and mustard oil have also recorded significant increases. The impact is particularly important for India because the country imports more than half of the edible oil it consumes.

The Russia-Ukraine war and disruptions in the Black Sea are adding another layer of uncertainty. Russia and Ukraine are major suppliers of sunflower oil and other agricultural commodities, while the Black Sea remains a crucial export corridor for wheat, corn, sunflower products and vegetable oils.

At the same time, concerns over El Niño and uneven monsoon rainfall could affect India's oilseed crops, including soybean, groundnut and mustard. Lower domestic production could increase India's dependence on imports and put additional pressure on food prices.

However, India's strong food-grain inventories and improved rainfall provide some cushion.

India Inflation Warning | Edible Oil Prices Surge As Black Sea War & El Niño Threaten Food Costs

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India Food Inflation Warning: Edible Oil Prices Surge, Black Sea War And El Niño Raise Household Cost Risks

India Inflation Warning | Edible Oil Prices Surge As Black Sea War & El Niño Threaten Food Costs