Essential commodities cost more
A shortfall in production and procurement have pushed up the prices of eight essential commodities by 19% on an average since July ’05, while the per capita income of an Indian went up a meagre 6%, according to industry body Assocham.
By Agencies |
MUMBAI: A shortfall in production and procurement have pushed up the prices of eight essential commodities by 19% on an average since July ’05, while the per capita income of an Indian went up a meagre 6%, according to industry body Assocham.
“Prices of essential commodities like wheat, pulses, coffee, tea, sugar, milk, condiments and spices, eggs, fish and meat have gone up by 19% on an average in the period between July ’05 and August ’06,” Assocham said in its report.
Delay in revision of statutory minimum prices and shortfall in production and procurement were some of the reasons for this trend, the chamber said in a release. Sugar output during the reporting period declined due to drought and pest infestation in major sugar producing states of Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu.
Increase in prices of pulses ranged between 7.4% and 33.3% between July ’05 and August ’06. Gram, urad and moong were particularly on an upswing, it said. Milk prices climbed by 0.3% to 7.8% due to increase in input, utility and service costs. The price rise has been largely attributed to low powder stocks with dairies.
The study said the rise in prices of essential commodities and per capita income was absolutely disproportionate. While prices of pulses, coffee, tea, and spices witnessed a sharp hike of up to 33.3%, 33.7%, 24.7% and 24.8% respectively, wheat, sugar, milk and eggs saw an upward movement in the range of 8.5%, 7.6% and 7.8%.
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Assocham said the principal reason for the buoyant coffee market was the anticipated tight supplies that would be just enough to satisfy the growing demand. In its study, the industry body ruled out the improvement in supply in the current coffee year ending June ’06. “The government needs to manage expectations by buying futures options in the international market and should evolve a flexible procurement and pricing policy for import programme spread over several years. This should smoothen the domestic supply-demand gap,” the chamber recommended. Assocham president Anil Agarwal said the imports programme should be shaped in such a way to take advantage of global price trends.
“While substantial increase in consumption of milk and its products among households has added to the scaling prices, sugar prices increased because of drought conditions and pest infestation in major sugar producing states,” he said. Drastic change in eating habits has also contributed to this trend, the study said.
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