Food inflation spiked to 7.74% in September 2026, up from 5.97% in August. The statistics ministry said onion prices rose by 108.09%, while rice inflation reached 8.25%. Sujan Hajra said, "The sequential pickup in food prices suggests that the rise was not entirely base-driven." Many households now face higher costs.
Sequentially, the all-India Consumer Food Price Index (CFPI) rose by 1.44% last month from the August level, a significantly higher rise than what was seen in August. Food inflation was 5.97% in August 2026, and it was in negative territory for seven months through December 2025.
Food inflation was 2.13% in January 2026, when the new consumer price index (CPI) series with a base year of 2024 was introduced by the Ministry of Statistics and Programme Implementation (MoSPI).
Using both the current and previous CPI series (the latter with 2012 as the base year), food inflation in August was the steepest in 21 months.
Inflation in onion (108.09%), ginger (62.85%), garlic (54.62%), sugar (29.8%), chicken (8.41%) and mustard oil (7.31%) reported steep hikes, according to the statistics ministry. The retail prices of vegetable oils in the category, according to MoSPI, rose to 9.87% in September year-on-year.
Average retail onion prices rose to Rs 53.37/kg on Monday, up 112% from a year earlier. Retail prices have risen by more than 50% over the past month, while prices in Delhi-NCR have crossed Rs 60/kg.
Trade sources attributed the price rise to reports of a 5-7% decline in kharif onion output in Maharashtra, the country's largest onion-producing state, due to lower acreage and delayed monsoon rains.
Inflation in rice last month was 8.25% compared to 5.89% in August, 2026. According to the agriculture ministry, paddy sowing this season has lagged 4% to 42.68 million hectare (Mha) in the ongoing kharif season compared to the previous year owing to deficient monsoon rains.
Trade sources said the rice output is likely to decline to 147 million tonne (MT) in 2026-27 crop year (July-June) from a record 154 MT in 2025-26.
Early data for domestic retail food prices for October points to persistent food inflation pressures despite some moderation in sequential price momentum, Aditi Nayar, chief economist, ICRA, said. ICRA expects the YoY inflation in the fruit and beverage segment to cross the 8% mark in October 2026.
Despite the rise in food inflation, prices of potato (-11.5%), tomato (-8.62%),and lady finger (-4.48%) and coconut (-3.99%) declined in September 2026 on a year-on-year basis. There was moderate inflation in wheat (1.64%) and chana/split (-1.4%) last month year-on-year.
"The sequential pickup in food prices suggests that the rise was not entirely base-driven. Looking ahead, inflation is likely to remain elevated in the near term," Sujan Hajra, Chief Economist, Anand Rathi Group, said.
Overall, the area sown under the kharif crops -- paddy, pulses, oilseeds, cotton, sugarcane and coarse cereals -- stood lower at 109.49 Mha, 1.4% below the previous year's level, according to the agriculture ministry. However, experts say that erratic rainfall and skewed distribution across the country are expected to adversely impact kharif crops' yield and likely push up prices of pulses and rice.