India's Food Price Crisis: El Niño, Ethanol Demand Drive Inflation

Food prices in India have been rising sharply due to various factors such as weak monsoon rains, ethanol demand, and global conflicts. The traditional thali, a set meal that includes staples like onions, ginger, and cooking oil, is becoming increasingly expensive for households.

The prices of onions have surged by almost 50% from last year, while vegetable oil used for frying street snacks has also seen an increase. Ginger, essential for flavor, has risen more than 70% in the latest consumer price index for August. The weak monsoon rains, linked to the El Niño weather phenomenon, have led to a 15% shortfall in rainfall compared to normal levels.

The shortage of rain is affecting crop yields, with rice and corn plantings running behind last season's pace. The government has allowed duty-free sugar imports due to worries of a shortfall. Biofuel policy is also contributing to the problem, as increased demand for ethanol-blending targets grain and feedstock supplies.