Explain food prices are soaring even though India's inflation rate is negative currently?

Question

Accepted Answer

Food prices are influenced by various factors beyond inflation rate.

Food prices are affected by supply and demand factors.
Transportation and storage costs also impact food prices.
Weather conditions and natural disasters can affect crop yields and prices.
Government policies and subsidies can also impact food prices.
Consumer preferences and trends can also influence food prices.
Inflation rate may not accurately reflect the cost of food items.
For example, the cost of vegetables and fruits may have increased due to supply chain disruptions during the pandemic.
Similarly, the cost of meat and dairy products may have increased due to increased demand and transportation costs.
Overall, food prices are influenced by a complex set of factors beyond inflation rate.

Top UBS interview questions & answers