Pulse prices catch fire, see sharpest spike in a decade: CRISIL

MUMBAI: Even as consumer price inflation surged for the third straight month and wholesale inflation remained in deflation territory for the 12th straight month, pulse prices have failed to offer any sign of encouragement. Food inflation escalated to 5.25 per cent in October while price of pulses rose 42 per cent in October, despite government efforts to rein in the price increase through imports and by curbing hoarding.

“While nearly all food components are seeing a decline in inflation, pulses inflation has seen the sharpest spike in a decade,” Crisil Research said in a report. “The CPI and WPI inflation for pulses was 42.2% and 53%, respectively in October.”

According to Crisil Research, a Standard & Poor's company, data for the last decade shows a clear pattern of spike in pulses inflation every third year. And with WPI inflation already crossing 34% average so far, the pressure continues to come from Pulses.

Carrying a 39.1% weight in the CPI, food inflation is down to 4.1% so far this fiscal compared with 7.6% in the same period last fiscal. But while nearly all food components are seeing a decline in inflation, pulses inflation has seen a very steep spike. The last few years have seen frequent and regular acceleration in pulse-prices. In the last decade while overall WPI inflation rate fell to 6.3%, pulses inflation has been much higher at 9.4% average. “Such high inflation rate in pulses is undesirable for a country where pulses are second most important part of diet after cereals and an average Indian spends nearly 5% of his food expenditure on pulses,” Crisil research added.