Edible oil has become dearer by 25% to 65%; milk prices increased by 26%
The prices of eight essential commodities like condiments& spices, pulses, wheat, sugar, edible oil, tea, coffee and milk have risenby 18% on an average from September 2011 to September 2012 while per capitaincome of an average Indian went up by 10%, an analysis carried out by theAssociated Chambers of Commerce and Industry of India (ASSOCHAM). It would haveimpact on the Diwali festivities.
The “Aam Adami” is likely to suffer more on account offurther price increase in the upcoming festive season due to erratic rainfalland thin stocks coupled with high demand, says the ASSOCHAM paper on “Foodinflation likely to rise in festive seasons”.
While prices of spices, pulses, wheat, sugar have becomedearer by 30%, 29%, 19% and 18% respectively, other essentials like edible oil,tea, coffee and milk saw upward moment in the range of 11%, 10%, 9% and 7%respectively.
The per capita income of an average Indian estimated aboutRs. 42,141/- per annum in FY 2011 went up by about Rs. 4,404/- in 2012, amountingto Rs. 46,345/- per annum. The ASSOCHAM adds that the rise in essentialcommodities prices and per capita income was utterly disproportionate.
The prices of spices edged much higher from period inSeptember 2011 and have witnessed extremely higher volatility in their priceswhich went up to the extent of over 42% between September 2012 to October 2012.
The per capita consumption of spices in India is said to beon the rise following a change in the food habits of the people. Winter, whichis the season of weddings in North India along with Christmas and New Year, mayalso lead to an upsurge in demand for the spice, adds the ASSOCHAM analysis.
The good demand due to upcoming Diwali, inflation has taken severalessentials like spices, edible oil and milk out of the common man's reach,said D.S. Rawat, Secretary General,ASSOCHAM.
Commodities like various types of edible oil have becomedearer by 25% to 65%. In addition, prices of milk, ghee, onion, maida, wheatand other items have risen by a minimum of 10% to a maximum of 60%.
During September 2011 and September 2012, Milk pricesincreased by 26%. The demand for milk is increasing much faster than productionand consumption of milk and milk products has significantly gone up in thecountry. Apart from the fast increasing appetite of Indians for dairy products,increased cattle feed costs and shortfall in milk procurement during the winterseason are the major factors behind the increase in milk prices.
The multiplier effect can be seen on milk products whereprices of critical products like ghee and butter have increased respectivelyduring the period. The eating habits have undergone a major transformation withthe growing demand for pizzas, where large quantities of cheese and butter areused.
India is the largest consumer of tea; it consumes thelargest quantity in the world, accounting for nearly 16% of global retailvolume sales. Geographically, tea is widely consumed in the North, East andWest of India, and is popular with a wide variety of social classes andconsumer age groups. Prices of Tea have increased by 11% from September 2011 toSeptember 2012.
Wheat prices have remained firm on the back of low stocksand high international prices. On a year-on-year basis, wheat prices haveincreased by 10% from September 2010 to September 2011.
The recent increase in the price of wheat is clearly becauseof demand exceeding supply a situation arising out of lower market arrivals,lower procurement, decline in the buffer stock below the norm, said Mr. Rawat.
All essential pulses have witnessed extremely highervolatility in their prices, which went up to the extent of over 9% betweenSeptember 2011 to October 2012. The gap between demand and supply in thecountry has led to a hike due to dormant production of pulses. Wheat priceshave remained firm on the back of low stocks and high international prices.Gram, urad and moong were particularly on upswing.
Patchy rainfall in central and southern India at thebeginning of monsoon season and heavy rainfall in July in few areas delayedsowing and affected growth of some crops, lifting prices ahead of the festiveseason, Rawat said .
