Onion prices push up food inflation
Dec. 23: It may not come as a surprise to consumers, but food inflation — which measures the pace of price rise for agricultural commodities, is up sharply. The past few weeks have seen prices of specific agricultural commodities such as onions shooting up.
For the week ended December 11, food inflation stood at 12.13 per cent — from less than 10 per cent earlier. However, it is not just the rise in onion prices that is responsible. Compared to the last year, prices of vegetables, egg, meat, fish and milk are all up 15-20 per cent. Onion of course rules the roost, with prices up 33 per cent over December 2009. Since these figures are almost a fortnight old, the subsequent food inflation figures are likely to be a bit higher.
It is after four weeks that food inflation has jumped into double-digits. In the previous week there was a 2.67 per cent increase in food inflation, which should be a matter of concern for the policy-makers.
“Of course the weekly fluctuation takes place and one of the reasons may be the high prices of onions, for which we have taken steps,” said finance minister Mr Pranab Mukherjee. The prices of onions have recently shot up to `80 per kilogram due to destruction of crops in some onion producing states as there was abnormal rains. he said that among the steps taken to cool prices of onions are a ban on its exports, abolishing import duty and asking PSUs to import more onions.
Economists also said that the sudden increase in food prices is not a trend. “It is a short term phase,” said Crisil, chief economist Mr D.K. Joshi. However, economists point out that as compared to a decade ago, food prices will remain at a higher level. This is because while there has been increase in the demand due to increase in rural wages and other factors, there has not been a very significant increase in the production of agriculture products.
Post new comment