India's retail inflation may rise to 5.47% in September as food prices climb: UBI

New Delhi: India's retail inflation may rise to 5.47 per cent in September from 4.82 per cent in August, driven by a sharp increase in food prices, according to a report by Union Bank of India (UBI).The report estimates that food inflation will accelerate to 7.35 per cent in September from 5.66 per cent in August, with vegetable prices emerging as the biggest contributor to the increase. The projected rise would take headline inflation to its “highest since Dec’24 and well above the RBI’s comfort level”, the report said. Vegetable inflation is estimated to have jumped to 9.34 per cent in September from 0.99 per cent in August. Onion prices rose around 34 per cent during the month, contributing significantly to the increase in vegetable prices, according to data cited in the report from the Department of Consumer Affairs.Food price pressures are also spreading across other categories. UBI expects inflation in cereals to rise to 3.75 per cent in September from 2.82 per cent in August, while pulses inflation may increase to 4.19 per cent from 3.06 per cent. Prices of sugar, edible oils and milk also remained firm.The report attributed the increase in inflation to prolonged supply disruptions, higher energy costs, rising global chip prices and the effects of a possible Super El Niño.“Food inflation has travelled quick and far and has become sticky from 2.12% in Jan’26 to 5.66% in August’26 with Super El-Nino occurrence and war led supply disruptions even as low base of last year continues to play the spoilsport,” the report said.Weather conditions could add to the pressure on food prices. The southwest monsoon ended the June-September 2026 season with rainfall 13 per cent below the long-period average, while reservoir levels stood at 72 per cent, compared with 92 per cent a year earlier.Total kharif crop sowing was around 1 per cent below last year's level, with paddy sowing down nearly 3 per cent.Core inflation, which excludes more volatile components, is also expected to edge up to 4.48 per cent in September from 4.44 per cent in August, suggesting that price pressures are extending beyond food.UBI said the broad-based rise in prices indicated that supply shocks were increasingly feeding into the wider inflation basket, adding that the persistence of food and other price pressures would remain an important concern for the inflation outlook in the coming months.