Even as food inflation remains in the double-digit, the Union government has attributed price rise to the “combined effect'' of factors such as shortfall in domestic supplies, increase in the minimum support price (MSP) of major commodities, hardening of international prices, changes in consumption patterns and adverse weather and climate change. Food inflation was 16.04 per cent for the week ending April 24.
Partly due to MSP
According to Minister of State for Agriculture, Food and Consumer Affairs K.V. Thomas, rice and wheat prices escalated “partly'' due to the increase in the MSP of the two commodities.
Sugar prices shot up owing to less-than-estimated sugar production in 2008-09 and lower output in 2009-10. Pulses prices shot up due to the mismatch between demand and supply and hardening of international prices.
Seasonal factors contributed to the escalation in the prices of vegetables and fruits. Onion prices increased primarily on account of the floods in Andhra Pradesh and Karnataka and heavy rains in Maharashtra that hit the kharif crop of onions and its supply to markets across the country.
The increase in the cost of milk production is due to enhancement of the price of cattle-feed ingredients and higher consumption of milk in rural areas due to increase in the disposal income of rural population as a result of implementation of income and employment generation scheme, the Minister said.
“Market expectations and sentiments also play a major role in price rise. Delayed monsoon as well as floods triggered an expectation of lower production, which also contributed to pushing up the price level of food articles,'' he added.
Prices of pulses, sugar, edible oils, wheat, atta, rice, milk, milk products, vegetables and fruits have been unusually high in the last two years.
As per official data, retail sugar prices in Delhi are at Rs.32.5 a kg against Rs. 17 a kg two years ago, rice Rs.22.50 (Rs.18), tur dal Rs.70 (Rs.42), moong dal Rs.84 (Rs.37), masoor dal Rs.56 (Rs.47), milk Rs. 23 a litre (Rs. 20), loose tea Rs.150 (Rs.108). Onion and potato prices remain high.
As the rabi harvest and procurement season is on, wheat prices came down to Rs. 13 a kg, the same level as two years ago, although atta and wheat products remain high.