New Delhi, India – Meena Chaudhary usually visits the local market in the late afternoon, when vendors are busy wrapping up makeshift stalls and vegetables are being sold at scrap prices. The quality is deteriorated, but that does not matter. It’s one of many tricks the 48-year-old housewife uses to cope with soaring food prices.
In the Chaudhary family, diets have changed dramatically in the last two years. A liter of cooking oil is used with the utmost caution to last about two weeks, halving consumption, milk is an occasional delicacy, and fruits and meats are out of reach. Even the humble egg has disappeared from the shrinking menu.
“When my daughter goes to her beautician training classes, she is embarrassed to bring a lunch box from home because her friends might find out what we are eating,” Chaudhary she said sitting in a small apartment in South Delhi’s Jagdamba camp, where she lives with her husband and three adult children.
The most noticeable effect of falling profits dented by inflation has been on household diets, said Dipa Sinha, an assistant professor at Delhi’s Ambedkar University. According to Sinha, who is also part of an India-wide right to food campaign led by civil society groups, families are not only eating less, but also eating fewer items, which translates into a decrease in dietary diversity and nutritional outcomes. “Our field surveys show that most families have drastically reduced their consumption of legumes, oils, proteins and perishables that are beyond their budgets. They are turning more and more to the food subsidy scheme administered by the federal government”, which is based on cereals.
Retail inflation in India rose to 7 percent in March, a 17-month high, led by a more-than-expected rise in food prices that soared 7.7 percent year-on-year. The Russia-Ukraine conflict that led to a surge in global prices for food, energy and fertilizer now threatens to make life harder for families like Chaudhary’s.
Even grain prices, hitherto benign, show signs of rising as India aims to fill the wheat supply gap created by the war. India’s wheat exports could hit record levels in 2022-23 despite an estimated 10-15 percent drop in production following an unusually hot March. However, signs of domestic shortages could push the government to impose export restrictions and join the growing club of countries that want to secure domestic food supplies, resisting prospects for higher export earnings, experts said.
China, for example, has been on an import spree since early last year even as it restricted fertilizer exports, while countries like Indonesia The US and Argentina, the main suppliers of edible oils, have recently imposed export restrictions to keep food prices in the country under control.
India’s enthusiasm for exporting wheat could return at a later date, said Siraj Chaudhry, chief executive of National Commodities Management Services Ltd and a former president of Cargill India. “The desire to export could precipitate a run on stocks and impact the delivery of state-run free food schemes.”
India’s high-grain food subsidy programs helped over 800 million enrolled families ward off extreme hunger during the pandemic. “If the government discontinues the free food programme, which runs until September, due to grain shortages, it will be a vindication that India’s food surpluses are fictitious and masked by widespread malnutrition,” said Sinha, of the Right to Food campaign.
Recent surveys point to a precarious situation. More than two-thirds of families couldn’t afford gas to cook, skipping meals was common and one in two families went without food in the month before the survey, a Hunger Watch report published in February by the campaign found. Right to Food which surveyed 6,500 families in 14 states.
Other poll by Azim Premji University published in late March, which surveyed 3,000 families in low-income settlements in India’s start-up and tech hub, Bengaluru, found that four in 10 workers were still unemployed for close to two years. after India announced a strict lockdown in March 2020. A staggering 40 percent of families reported eating less than they did before the pandemic, while more than a quarter borrowed from informal sources and sold or pawned jewelry to cover daily expenses.
The risks of higher food prices in the coming months would make things worse for families like the Chaudharys. His one-room home with a kitchen is up a flight of rickety iron stairs, past a dark, narrow passageway. The camp is a maze of narrow alleys with houses stacked like matchboxes on either side, home to low-income families of casual workers who service the city’s posh neighborhoods.
Chaudhary’s husband earns 10,000 rupees ($130) a month from his job as a security guard, the same as he did two years before the COVID-19 pandemic. Her children, ages 19 and 22, have been looking for work for months. Reduced income coupled with rising food and cooking gas prices have forced the family to give up the occasional fry-up and homemade treats. When a guest arrives for a few days, the family’s carefully planned expense sheet is thrown into disarray. However, most months’ cash runs out by the twentieth, prompting Chaudhary to borrow from friends and neighbors or search through the family’s meager savings.
But food inflation will remain a problem as there are no signs of a resolution to the Russia-Ukraine conflict and resulting supply shocks, said Dharmakirti Joshi, chief economist at CRISIL, a ratings and research firm. “Government budgets will be affected due to the increase in subsidies for food and fertilizers. The worrying aspect is that food inflation is becoming more widespread, which is increasingly affecting raw materials.”
The result could be devastating for a considerable part: six out of 10 Indians depend on food subsidized by the state. Grain inflation is likely to be aided by rising prices for wheat, corn and barley, which threaten to make everyday items from bread, poultry and milk to crackers and beer are expensive for consumers. The hit to consumers’ wallets will come on top of rising edible oil prices, largely due to India’s acute dependence on imports.
Wholesale agricultural markets would be on fire now were it not for lower incomes and subdued consumer demand, said Arshad Perwez, chief revenue officer at Our Food, a Hyderabad-based agricultural supply chain startup. “Previous periods of high food prices, for example between 2009 and 2014, were driven by both supply constraints and strong demand, unlike now when aggregate demand is visibly weak.”
That weakness is palpable in places like the Jagdamba camp. Surya Kali, a 43-year-old mother of two, reduced her daily purchases of milk from one liter before the pandemic to a 200ml pack priced affordably at Rs10 ($0.13). “Fruits and chickens are the stuff of dreams. I can’t even afford to buy my pleading daughter a glass of fresh sugarcane juice when she comes home from school. Instead, I tell him: You’re going to catch a cold,” she said.
For some on the margins, life is at a turning point. Kaushilya Devi, a widow who works as a domestic worker, was recently diagnosed with cervical cancer. You can’t afford the doctor-prescribed diet that includes three glasses of milk a day, especially after the government deemed your document invalid this enabled him to access the state food subsidy scheme once he migrated to Delhi in search of work.
On a scorching summer day last week, she prepared to cook a one-pot meal for herself and her three children. Rice, donated by the family where she works as a helper, cooked with onion, green chillies, a pinch of salt and a few tablespoons of oil. She called it pulav, also known as pilaf, a nutritious dish cooked with generous portions of meat, spices, vegetables, and fats.