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Wednesday, January 13, 2010

Food prices likely to come down: Commerce Min

The driest spell in nearly four decades and then floods in parts of the country have pushed up food prices, which officials and policymakers have said could fuel broader inflation.

The annual food prices went up 18.22% for the week ended December 26, 2009. The number for the previous week stood at 19.83%.

The issue of rising food prices is a matter of concern. However, it (food prices) is likely to come down due to good winter crop prospects, Commerce and Industry Minister Anand Sharma said on Monday, adding, “There is no need to import wheat and rice.”
"We don't have a situation of India needing to import wheat and rice. With good prospects of rabi (winter-sown crops) we are hopeful of food prices coming down," Sharma said, adding, there is not need to import wheat or rice in India.

(With inputs from Agencies)
Source: Moneycontrol.com
Courtesy moneycontrol.com

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Food price index up 18.22 y/y on Dec 26: Govt

India's food price index rose 18.22% in the 12 months to December 26, while the fuel index was up 4.85%, the government said on Thursday.

The driest spell in nearly four decades and then floods in parts of the country have pushed up food prices, which officials and policymakers have said could fuel broader inflation.

C. Rangarajan, the prime minister's economic adviser, on Tuesday said some liquidity tightening might be needed to moderate price expectations.
India's annual wholesale inflation rose to 4.78% in November, compared with 1.34% rise in October and 8.48% a year ago.
Source: Reuters
Courtesy moneycontrol.com

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PM calls meet with state FMs to review food situation

Prime Minister Dr Manmohan Singh will hold a meeting with finance ministers of states on January 27 to discuss the situation of soaring food prices in the country. Annual food prices have risen about 18% over the previous year, when data last came in, sparked by one the worst droughts seen in decades last year that impacted agriculture produce.

“The meeting will discuss the situation, review the implementation of the Essential Commodities Act, and call upon states to lift more food stocks from the central government’s public distribution system (PDS),” Agriculture Minister Sharad Pawar said.

Pawar also implored states to play an active role in containing food inflation by procuring stock more effectively. “In the last two months, the allocation of wheat to states through PDS stood at 20 lakh tonne but only 1.59 lakh was lifted. Of the 10 lakh tonne of rice allocated, only 2.09 lakh was lifted by the states,” he pointed out.
State governments had also been asked to undertake anti-hoarding measures to control prices, the agriculture minister said, adding the centre would increase open market operations to sell excess wheat and rice through various agencies.
Pawar also outlined a number of measures to control prices of sugar, which are near their lifetime highs globally, as a result of shortage due to drought in India and floods in Brazil, the two major sugar producing countries.

“The Cabinet Committee on Prices (CCP) has approved extending the deadline for refined sugar imports to December 31,” Pawar said, adding that among other measures, the government was mulling removal of VAT on imported sugar, and that the Home Ministry would crack down on smuggling of sugarcane and sugar in the country.

The CCP has also asked the government of UP, one of the largest sugar producing states, to allow movement of imported raw sugar into the state to the tune of 9 lakh tonne, Pawar said.

“I am confident that these measures will cool sugar prices and that prices would start coming down in eight to 10 days,” he said.

Pawar also refuted talk that he was under fire from Cabinet colleagues for, as an agriculture minister, failing to control food prices.
Source: CNBC-TV18
Courtesy moneycontrol.com

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Govt moves to boost food supplies to tame inflation

The government ordered the sale of stocked grain and extended duty-free sugar imports by another nine months, hoping to rein in high food inflation and head off the need for raising interest rates.

An 11.7% surge in industrial output in November, the fastest in two years, following rapid economic growth in the September quarter, has sparked concern the central bank would tighten policy later this month to temper inflation expectations.

The government, struggling to tame food inflation hovering near 20% in December, said the country had adequate grain stocks, ruling out rice imports that seemed likely after the worst monsoon in 37 years ravaged paddy fields in 2009.

Farm Minister Sharad Pawar said duty-free imports of white sugar would be extended by nine months to December 31 as New Delhi looks to cover a supply shortfall for the second consecutive year in the world's biggest consumer of the sweetener.

He also said the government would release up to three million tonnes of wheat and rice in the open market, and ask more official agencies to retail grain.

"With the measures we have taken, the prices of essential commodities are expected to start coming down in seven to 10 days," Pawar told reporters after a cabinet panel reviewed food prices.

Separately, Finance Minister Pranab Mukherjee said Asia's third-largest economy was likely to grow about 7.75%, higher than the government's earlier estimate of 7% and the central bank's forecast of 6% "with an upward bias".

Last week, official data showed that food prices climbed 18.22% in late December, just off an annual rise of 19.83% a week earlier.

Mukherjee said high food inflation as well as rising expenditure for supplying subsidised fertilisers to farmers were major areas of concern.

Source: Reuters
Courtesy moneycontrol.com

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