Ready-made food prices may stay high as input, packaging costs rise

New Delhi: Prices of ready-made food products such as savouries, sweets, and snacks are likely to remain elevated, as higher input and packaging expenses and rising costs of key ingredients continue to feed into retail rates.

Inflation in ready-made food products accelerated to 9% year-on-year in July from 6.7% in June and 0.8% in January, according to statistics ministry data. Prices of key commodities such as tomatoes and edible oil rose 23% and 18%, respectively, year-on-year between April and July 2026 while sugar prices increased 3%.

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Pushan Sharma, director at Crisil Intelligence, said these commodities are critical inputs for prepared foods, confectionery and desserts, raising production costs and, consequently, market prices. “Ready-made food products are reflecting higher input costs, partly due to the West Asia conflict and its impact on packaging, transportation and other raw materials. These higher costs are gradually being passed on to consumers,” said Gaura Sengupta, chief economist, IDFC First Bank.

Within the ready-made food category, spices, culinary herbs and seeds recorded the highest inflation at 12.2% in July, up from 8.9% in June. Inflation in other served processed food, including chaat, bhel puri and golgappa, stood at 6.4% while other packaged processed food, including chips, rose 0.9%.

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“For ready-made food products, higher prices of key ingredients such as vegetables can push up input costs. If prices of ingredients like tomatoes rise, that increase will eventually be reflected in the cost of the final product, even if manufacturers buy them in bulk for a certain period,” said Madan Sabnavis, chief economist, Bank of Baroda.Sugar, confectionery and desserts recorded inflation of 3.4% year-on-year in July compared with 2.4% in June. Within this category, prepared sweets saw inflation rise to 6.1% from 5.8%.

Sugar prices rose 4.9% in July compared with 2.2% in June. “The rise in sugar prices is due to supply-side issues as well as the global influence,” said Sabnavis, adding that even if India is not exporting, higher international sugar prices tend to influence commercial users. Wholesale prices also indicate cost pressures.