1 Food inflation has collapsed, but non-food prices continue to rise

According to the Consumer Price Index (CPI) data for January, which was released on February 12, food inflation has collapsed in the past two months. It grew 9.5% in November 2020, 3.4% in December 2020 and fell to 1.9% in January 2021. Non-food inflation, on the other hand, continues to increase, the respective numbers being 5.2%, 5.4% and 5.5%.

The developing situation is the stark opposite of what existed in the past year or so when food inflation had been higher than non-food inflation. This entails a worsening of the terms of trade, or the ratio of prices of products they sell and buy, for the farmers.