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A restructuring of the food basket

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A shop in T. Nagar.
A shop in T. Nagar.

Shyam Ranganathan

Prices of key food items have been rising continuously, with rice going up by nearly 18 per cent, and pulses by more than 10 per cent, in the last 3 months. This trend, bucking the government’s attempts to damp down inflation, is forcing many to restructure their food basket. K. Hemalatha, of Kolathur, says rising prices have forced her to cut down on meat. “The price of chicken has gone up from Rs. 120 to Rs. 150 in the last few months. We used to eat non-vegetarian food three days a week, but it’s become once a week now,” she says.

Rice and pulses have gone up by nearly 25 and 10 per cent respectively. “Even without ghee, dalda and other items this time, my bill has risen from Rs. 3,000 last month to Rs. 3,500 this month,” she notes.

R. Narasimhan, says, “In wholesale shops, I can get the items for 10 per cent less. Rice is a staple for us, but it’s possible to contain expenses by cutting down on wheat and pulses,” he says. But it is not just consumers, the last link in the supply chain, who feel the pinch. The bite is also felt by retailers and wholesalers.

S. Chandresan, Secretary, Tamil Nadu Foodgrains Merchants’ Association, says profits are down because of rising procurement costs; he blames big retail chains.

“They are buying up goods and cornering the market. The ceilings on rice and pulses force us to cut down on our stock levels and this hurts us when prices rise every day. Moreover, the big retail chains can exploit their presence in different states and leverage variations in price,” he says. A wholesaler catering to the hotel industry, K. Sooryanarayana, says that toovar dhal has risen from Rs. 36 to Rs. 42 in the last month.

Retailers have a similar story. While rice has gone up from Rs. 18 to Rs. 23 for the wholesale dealers, it has gone up from Rs. 20 to Rs. 25 for them, they say.

M. Ravi, who runs a retail store in Velachery, says he is worried about people reducing their consumption. “We stock up for a week because many of these items are staple foods. But if the prices continue to rise, they will stop buying things. Abu Tahir, manager for a retail supermarket chain, is less worried. “We give our customers special deals and use our product variety to hold on to our profits,” he says.

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