In Spain, it’s jamón. In Italy, Parmigiano Reggiano. In Japan, fresh fish. Every country has its culinary treasures, but when the prices of these beloved staples rise, the effects ripple through inflation metrics.
Food is a cornerstone of the consumer basket worldwide, especially in emerging markets. In India, for instance, food makes up nearly 50% of the consumer basket, meaning even small price shifts can drive big swings in headline inflation (Figure 1).
Figure 1
Governments are acutely aware of food’s outsized role in inflation, which is why food prices often drive policy debates and targeted interventions like price controls. For analysts, this creates a challenge: conventional indices can miss the nuance of how consumers actually experience food costs.
Turnleaf’s Food Proxy Baskets address this gap by concentrating on the items that have the greatest weight in household spending. This targeted approach offers a clearer, more accurate view of food-driven inflation dynamics than broad-based measures. In the next sections, we illustrate a couple applications of our food proxy basket:
India: When Seasonality Meets Policy
India’s food prices are notoriously volatile, influenced by harvest cycles and weather shocks. Authorities frequently step in, injecting supply into markets for tomatoes, onions, potatoes, or pulses to stabilize prices. While these dynamics are nearly impossible to capture by tracking individual inputs, our Food Proxy Basket (Figure 2) simplifies the complexity. By following daily price movements in key items, our basket helps us identify inflationary shifts in real time, often serving as a critical driver of our nowcasts and enabling us to forecast with greater accuracy than the market.
Figure 2
Hungary: Reading Between the Price Caps
In Hungary, we found that food prices cooled under profit margin caps implemented on essential goods from the end of March 2025. We also found that substitution effects drove up prices of uncapped items. By parsimoniously selecting items that reflect the true average consumer basket, Turnleaf’s Food Proxy basket for Hungary (Figure 3) was able to capture the direction of the swing beyond seasonal patterns. This approach has given us a measurable edge: during the six months when caps were imposed, our tracking allowed us to outperform the market in forecasting inflation trends.
Figure 3
With Turnleaf’s Food Proxy Baskets, analysts can track the most sensitive and impactful movements in food inflation, anticipate government interventions, and sharpen their models where it matters most. Because when it comes to inflation, what’s on the menu matters.