India has received 11% less than normal rain so far; this has kept food inflation above 16% for 9 weeks in a row
Food inflation has been above the 16 per cent mark for nine straight weeks. It stood at 16.90% on June 12, pushed up by higher prices of pulses, vegetables and milk.
And there are ominous signs that unless the south-west monsoon, which has been virtually stationary for the past week, shows signs of advancing, food prices will rise further. Monsoon accounts for 80 per cent of rain India receives, and 60 per cent of the area under cultivation is rain-fed.
Milk prices in Gujarat are also expected to rise if the monsoon is delayed. The Gujarat Co-operative Milk Marketing Federation (GCMMF) is planning to hold a meeting on July 2 to consider raising milk prices. “As of now, no hike is required but if the monsoon gets delayed any further, we may have to call a meeting on July 2 to decide on a hike in milk prices,” a source in the federation told DNA.
The India Meteorological Department (IMD) on Saturday said that India had received 11 per cent less rain than what it gets during the June 1-23 period. The country had received 97.4 mm rainfall for the June 1-23 period as against the normal of 109.6 mm, the weather office said. Weather scientists, however, have said that there is no need for alarm. The southwest monsoon, which is nearly 10 days behind schedule over north India, is expected to strengthen with the formation of a low-pressure area in the Bay of Bengal.
The delayed monsoon has been causing concern among economists and government officials. Despite the high food inflation prevailing in the country, experts feel that any immediate tightening of money supply by the RBI to arrest the price rise appears unlikely.
On a weekly basis, vegetables prices rose by 8.06 per cent and price of condiments and spices by 3 per cent. Urad, moong and tea became expensive by 1 per cent each during the week. Chief Statistician of India Pronab Sen said that, initially, food inflation rose due to sugar, followed by high prices of horticulture (fruits and
vegetables), then pulses and then
foodgrains.
“Price of pulses and sugar has moderated over the past several weeks but the easing of prices is still to happen in horticulture,” said Sen, who avoided risking a forecast. While some economists have been talking of the need for action by the RBI, others said no immediate action was warranted.
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