Bath Curry Indicator trending down

Advocata Institute’s Bath Curry Indicator (BCI), which tracks changes in the retail price of food in Colombo that typically goes into a packet of rice, recorded a year-on-year increase of 53 percent in October 2022. 

Compared to June 2022, prices of the BCI basket of food have been declining. The average price of green chillies, 

tomatoes, dhal and beans fell over the past four months, contributing to the reduction of the overall BCI. Supermarket prices tracked by the BCI also show a similar trend. 

Official year-on-year food inflation stood at 85.6 percent in October 2022 based on the Colombo Consumer Price Index. A decline of 2 percent compared to September 2022. 
Food inflation in Sri Lanka over the past 24 months has increased at an unprecedented rate. Whilst external factors like the pandemic and the Russian-Ukrainian war have caused supply chain issues that have resulted in global price levels rising.

In Sri Lanka, the price increases are mainly a result of years of poor monetary, fiscal and trade policy.  A depreciated currency, ban on fertilizer and import bans in general due to low foreign reserves have exacerbated price increases. 

Continued decline in prices will depend on future macroeconomic policies made to bring down inflation as well as policies to improve agriculture productivity. 

“Food inflation in Sri Lanka is the fourth highest in the world according to the World Bank in September 2022,” said Dr. Roshan Perera, a senior visiting fellow at the Advocata Institute. 
“Although food price inflation is declining, it still remains at historically high levels. A continuing decline in international food commodity prices and improvements in domestic agriculture supply would be required to bring down inflation to previous levels. Access to fertilizer at a reasonable cost and at the right time would be vital to ensure adequate domestic agriculture supply,” she added.

The BCI tracks the weekly retail prices in the Colombo market of the most commonly consumed food ingredients that might be used in a typical Buth curry meal. The prices are collected from the “Weekly Indicators” that the Central Bank publishes.