No impact of freight cut on food prices: industry.

The Railway Ministry's proposal to reduce transportation tariff for foodgrain by Rs 100 per wagon would not have any cooling effect on food inflation, which was close to 18 per cent for the week ended February 6.

"The cut in freight charges is too meagre to see any impact on food prices," All-India Rice Exporters Association ex-president Vijay Sethia told PTI today.

At present, freight charges for carrying rice from Delhi to Mumbai is about Rs 27,000 per wagon. So, the marginal cut in transportation cost is not going to bring down food prices to the end-user, he added.

Making a reference to the hardships faced by people due to high food prices, Railway Minister Mamta Banerjee in her budget speech announced a reduction of Rs 100 per wagon in freight charges for foodgrain and kerosene for domestic.

Similarly, Pulses Importers Association President K C Bhartiya said: "The reduction in freight rates is only an eye wash. It will not affect foodgrain price at all."

Echoing a similar view, Flour Millers Association president Veena Sharma also said: "The reduction may not have any impact on prices, but it will help movement of the commodities from one part of the country to the other."

"The cut in freight rates may help reduce transportation cost for bulk users. But it will not bring down food prices in spot market," Kochi-based commodity brokerage firm JRG Wealth Vice-President and Research Head G Harish said.

Source : Business Standard