Maarthandam

Introduction

Inflation in everyday consumer products, such as ghee, butter, biscuits, and oils like coconut and groundnut, directly impacts the cost of living for most households. These essential items are staples in many kitchens and form an integral part of daily life.

Over the years, fluctuations in the prices of these products have been influenced by various factors, including supply chain disruptions, global market trends, and changes in production costs. While some years have seen relatively stable prices, others have experienced significant price hikes, affecting consumers’ purchasing power.

Understanding the trends in the inflation of these common products helps shed light on broader economic conditions and the financial pressures faced by households.

Gauging Validity of the Research

It seems quite impossible and difficult to notice that prices might rise 5% a month. But humans are forgetful. A litre of ghee costed 360 rupees in Guntur in 2014 , but now 1 litre of Ghee costs at least 500 rupees in 2024.

That is how inflation works.

Biscuits & Chocolates

The inflation for this category has generally been moderate over the past decade, averaging 3.86% per month. However, recent years (2020–2024) show an increase, with a 5-year average inflation of 4.71% per month. The highest inflation was recorded in December 2022 at 12.43%, indicating possible supply chain issues or increased demand during that period. Conversely, the lowest inflation was a mere 0.7% in July 2024, reflecting stabilization in prices.

Butter

Butter’s inflation averaged 5.38% per month over the analyzed period, with relatively stable trends. The past five years saw a slight reduction in inflation, averaging 5.05%, possibly due to improvements in production efficiency or market stability. The peak inflation occurred in January 2017 at 11.59%, which might have been influenced by increased dairy prices or supply disruptions. Interestingly, butter also experienced a deflationary month in July 2021, with inflation dipping to -0.06%, perhaps due to oversupply or subsidies.

Interact with the insights

Here’s a visual report. It’s very simple, and quite good looking.

All you need to do, is to select the category of product, ex: Biscuits & Chocolates have already been select, you can select butter, ghee etc.

Voila! The visuals change, the table changes.

Min, Max, Avg indicate the minimum, maximum and average inflation over the period of 10 years since 2014.

Coconut Oil

Coconut oil stands out for its extreme price volatility. While the 10-year average inflation is 4.04% per month, the last 5 years recorded a deflationary trend, averaging -0.96%. This indicates a sharp price correction, possibly due to increased production or reduced demand. The highest inflation was a staggering 61.09% in December 2017.

On the other hand, May 2016 saw a deflation of -31.5%, signaling an oversupply or significant price drops. These fluctuations suggest that coconut oil prices are highly sensitive to external factors like weather and global market trends.

Ghee

Ghee has shown consistent inflation over the years, averaging 5.19% per month. The past 5 years saw an even higher average inflation of 6.45%, indicating increased production costs or growing consumer demand. February 2023 recorded the highest inflation at 19.35%, which might have been driven by spikes in milk prices or transportation costs.

The lowest inflation, at -3.79%, occurred in November 2018, possibly due to temporary market corrections. This steady upward trend highlights ghee as a staple product with demand-driven inflationary pressures.

Groundnut Oil

Groundnut oil has one of the highest average inflations at 6.56% per month, with the past 5 years recording a significant increase to 9.01%. This suggests rising costs of production or heightened demand in recent times. The inflation peaked at 23.79% in July 2021, which could be linked to droughts, reduced crop yields, or increased export demand. On the contrary, October 2017 saw a deflation of -7.47%, potentially caused by an oversupply.

Mustard Oil

Mustard oil has exhibited substantial inflation variability. The overall average inflation stands at 5.12% per month, with the past 5 years showing a much higher average of 7.91%. This indicates a trend of rising prices in recent years. The highest inflation was recorded at 47.45% in October 2021, likely driven by reduced crop yields or increased export demand. Conversely, June 2023 experienced a steep deflation of -22.51%, possibly due to improved production or reduced demand.

How Biscuits handle the inflation

If you were to buy a packet of biscuit, formerly at INR 10, but now at INR 20, you’d never buy it, because the price difference would be suprising.

The companies know consumer behaviour as well. That is where, ladies and gentlemen, we introduce a new villain named shrinkflation.

Shrinkflation occurs when manufacturers reduce product quantity or quality while maintaining or slightly lowering the price. For instance:

• A coconut oil bottle might still cost ₹200, but the quantity may shrink from 1 liter to 900 ml.
• This phenomenon often occurs during periods of high inflation, allowing companies to offset rising costs without significantly increasing prices.

In short – same price, but smaller bottle without you even noticing the change

Data References & Source

Data Source – https://cpi.mospi.gov.in

Also read: Europe reduces Greenhouse gas emissions in 7 key industries

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