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Food bill to turn costly, potato, chilli prices double |
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KOLKATA & PUNE: Prices of several essential food items have risen over the past few weeks after staying still for almost a year, squeezing the budget of the common man while stoking concerns of food inflation just ahead of the Reserve Bank of India's April 5 monetary policy review.
Prices of chilli and potato are now double of what they were around this time of last year. Maize, wheat and soya bean have become dearer by 4-10% in the last one month and palm oil, which had touched a five-year low in 2015, has shot up 10% year-on-year, making the entire edible oil basket dearer. Sugar prices have shown the biggest increase, rising 28% in six months.
Analysts attribute the price rise to a fall in output caused by a decrease in crop area and unfavourable weather conditions. "Globally, sugar prices will continue to go up due to the weather problems," said Prerana Desai, vice-president (research) at Edelweiss Agri Value Chain. "The next crop in India is expected to be short unless there is a surprise from UP. The prices will continue to move up in the next 12 to 24 months."
Food inflation eased considerably in February to 5.3% from 6.85% in January, bringing retail inflation within RBI's target of 6%. Chilli producers said they see no sign of a cooling down of prices in the coming months. "Last year this time, price of chilli was Rs 60-65 per kg," said Anil Talera, owner of Talera Overseas, which operates from Guntur Mirchi Yard. "It has now doubled to .`125 per kg. The arrivals at Guntur have halved to 30 lakh bags from 60 lakh bags this time last year. Prices are expected to rise further."
India, which meets nearly 70% of its annual edible oil demand from imports, is having to pay more for palm oil as prices firmed up in Malaysia and Indonesia. In the last month, palm oil prices have climbed 13% to $700 per tonne. The year-on-year increase is 10%. This rally in palm prices has pushed up soya oil prices by 8.69% and sunflower oil by 5%.
"Prices will remain firm. But since rupee has strengthened against dollar, the impact will soften," said Sandeep Bajoria, CEO at oil consultancy firm Sunvin Group.
Prices of potato have doubled in the last one year. It costs Rs 18 per kg now as against Rs 9 per kg in March 2015. Farmers and traders say prices of potato have risen 50% in the last one month as acreage fell in West Bengal and UP and late blight disease damaged the crop. Prices of soya bean which had remained stable in the last six months despite a drastic fall in domestic production, have firmed up by 7-8% in the last one week. "Soya bean prices increased by 7% to 8% within a week in Indore mandi as the supply side is weak," said Davish Jain, president, Soyabean Processors Association.
The NCDEX spot soya bean prices in Indore increased 5.24% between March 3 and March 22 from Rs 3,671per quintal to Rs 3,874.
Source : economictimes.indiatimes.com
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