Food prices and El Niño: what the RBI says is moving and why

When rain fails, food prices are often among the first things people notice. On 7 October 2026, the Reserve Bank of India's Monetary Policy Committee spelled out how this season is playing out.

What has happened. Retail (CPI) inflation rose to 4.8% in August 2026 from 4.5% in July. The RBI said food price increases were broad-based, with spikes in sugar and onion.

Why. In the RBI's words, a "deficient south-west monsoon and strong El Niño conditions pose risks to agriculture sector's outlook and rural demand." It expects near-term price pressure from the weak monsoon and El Niño.

The cushion. The RBI noted that healthy foodgrain buffer stocks help mitigate the risk.

What the RBI expects. It projects inflation of 4.9% for July–September, 6.0% for October–December and 5.7% for January–March, or 5.2% for 2026–27 as a whole. These are projections and can change.

What it did. The MPC raised the repo rate by 25 basis points to 5.50% and changed its stance to calibrated tightening. Its next meeting is on 2–4 December 2026.

For households. Prices of items hit by weather, such as onions, can swing week to week. Buying seasonal produce and avoiding waste helps the budget. If you notice unusual price jumps in your area, share them in the help room so others can plan.

Join the El Niño help room on soshyal.com to ask questions and share what you see in your area.