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Sunday, Mar 30, 2008
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Prime Minister convenes meeting of Cabinet Committee on Prices

Gargi Parsai

Manmohan will review the availability and prices of all essential commodities

Import duty on soyabean oil to be cut
No wheat imports this year

NEW DELHI: With the United Progressive Alliance government coming under tremendous political pressure over soaring prices, Prime Minister Manmohan Singh has convened a special meeting of the Cabinet Committee on Prices here for Monday.

Food and Agriculture Minister Sharad Pawar, Finance Minister P. Chidambaram and Commerce Minister Kamal Nath will attend.

According to well-placed sources, Dr. Singh will review the availability and prices of all essential commodities, including edible oils, pulses, wheat, rice, sugar, vanaspati, cement and steel.

The meeting will evaluate the import and export position of all essential food commodities. The 40 per cent duty on soyabean oil, imported from the United States, Argentina and Brazil, is expected to be reduced to 20 per cent to encourage imports. The duty on palm oil was cut last week.

Although the Food Ministry has been authorised ‘in principle’ by the Group of Ministers to import wheat during the year, if necessary, the sources said there would be no imports this year as fresh harvest beginning April was expected to ease the supply position. Moreover, with several States going to the polls later this year, the government might not opt for buying foreign wheat at a price much higher than the minimum support price given to farmers, unless food security was threatened.

Last year the government imported wheat to the tune of 7.3 million tonnes to build up stocks.

Wheat production this year is estimated around 75 million tonnes with procurement for the Public Distribution System expected around 14 million tonnes. It was 11.1 million tonnes last year.

On the rice front, however, export of close to five million tonnes by private exporters — as against one million tonne last year — has got the government worrying. Initially the government banned all export of rice but political pressure — even from Congress MPs — made it allow millers to export high value rice.

According to the Department of Consumer Affairs, in the last one year, in the retail market of Delhi, the price of groundnut oil has risen from Rs. 98 to Rs. 121 a kg, mustard oil from Rs. 55 to Rs. 79, vanaspati from Rs. 56 to Rs. 79, rice from Rs.15 to Rs.18, wheat from Rs. 12 to Rs.13, atta from Rs. 13 to Rs.14, gram from Rs. 32 to Rs. 38 and , tur from Rs. 35 to Rs. 42.

Six months ago loose tea was selling at Rs. 108 a kg, potato for Rs. 14 and onion for Rs. 23. The price of milk rose from Rs. 18 to Rs. 20 a litre and salt from Rs. 8 to Rs. 10 a kg between March 27 , 2007 and March 27, 2008.

On Friday, Railway Minister Lalu Prasad met United Progressive Alliance chairperson Sonia Gandhi and urged her to convene a meeting of the UPA to discuss inflation, galloping towards seven per cent.

The meeting of the CCP is said to be a precursor to such a move.

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