Advocata ’rice and curry index’: Break in rising food prices for January

Advocata’s Bath Curry Indicator (BCI), which tracks the monthly changes in the retail price of food, recorded a decrease of 4 per cent from December 2021 to January 2022.  The overall decrease was driven by the falling prices of tomatoes (52 per cent), brinjals (21 per cent) and green chillies (17 per cent).

However, prices on average have been increasing with the year on year prices increasing by 16 per cent from January 2021 to January 2022.

In a media release issued by Advocata, Rehana Thowfeek, an economic researcher and an associate of the Advocata Institute explained the rising food prices over the past year:

“The prices of individual food items do tend to vary seasonally, so there may be an observable reduction in prices when you compare month on month, but over the long term, prices of food items have been trending upward. Food prices in Sri Lanka are being impacted by several different factors. On a global scale, prices are rising due to supply chain difficulties as the world is still struggling to recover from the pandemic, so some of our inflation is imported as we depend on the global market for fuel, consumables and raw materials.

Then there are also the local factors that are contributing to inflation. Due to a shortage in fertilisers and pesticides, and the government’s overnight organic policy, harvests have been severely impacted. Local supply chains are terribly strained due to the persistent dollar crisis in the country and continuous import bans. In addition, the Sri Lanka Rupee has depreciated significantly in comparison to last year, hence there is an inflation effect from the rising costs of production as well as an excess demand resulting from inadequate supply.“

The BCI tracks the weekly retail prices in the Colombo market of the most commonly consumed food ingredients that might be used in a typical Buth curry meal. The prices are collected from the “Weekly Indicators” that the Central Bank publishes. The BCI Indicator can be accessed at www.bci.advocata.org.