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Rising food prices burn holes Indians' budget: survey

Publication Date : 24-10-2012


The prices of essential commodities such as condiments and spices, pulses, wheat, sugar, edible oil, tea, coffee and milk have risen by 18 per cent on an average from September 2011 to September 2012 while per capita income of an average Indian went up by 10 per cent, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India (Assocham).

Indians are likely to suffer more on account of a further price increase in the upcoming festive season due to erratic rainfall and thin stocks coupled with high demand, said the business lobby’s paper on “Food Inflation Likely to Rise in Festive Seasons”.

While prices of spices, pulses, wheat and sugar have become dearer by 30 per cent, 29 per cent, 19 per cent and 18 per cent respectively, other essentials such as edible oil, tea, coffee and milk saw upward moment in the range of 11 per cent, 10 per cent, 9 per cent and 7 per cent respectively.

The per capita income of an average Indian estimated at about 42,141 rupees (US$784) per annum in financial year 2011 went up by about 4,404 rupees in 2012, amounting to 46, 345 rupees per annum.

The prices of spices rose much higher from the period in September 2011 and have witnessed extremely higher volatility in their prices which went up to the extent of over 42 per cent between September and October 2012.

The per capita consumption of spices in India is said to be on the rise following a change in the food habits of the people. Winter, which is the season of weddings in North India along with Christmas and New Year, may also lead to an upsurge in demand for spices, added the analysis. Inflation has taken several essentials such as spices, edible oil and milk out of the common man’s reach, said DS Rawat,  Assocham's secretary general.

Commodities such as various types of edible oil have become dearer by 25 per cent to 65 per cent. In addition, prices of milk, ghee, onion, maida, wheat and other items have risen by a minimum of 10 per cent to a maximum of 60 per cent.

During September 2011 and September 2012, milk prices increased by 26 per cent. The demand for milk is increasing much faster than production and consumption of milk and milk products has significantly gone up in the country. Apart from the fast increasing appetite of Indians for dairy products, increased cattle feed costs and shortfall in milk procurement during the winter season are the major factors behind the increase in milk prices.

The multiplier effect can be seen on milk products where prices of critical products such as ghee and butter have increased during the period. Eating habits have undergone a major change with the growing demand for pizzas, where large quantities of cheese and butter are used.

*US$1=53.7 Indian rupees


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