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Resource centre on India's rural distress
 
 

Food price inflation worries India


India's food prices have increased significantly over the weekend, leaving customers and shopkeepers extremely worried.

Reuters reports the price of onions in particular has peaked. Onions are currently selling between Rs 70-80 per kilogram ($AU1.56- $AU1.78), after being worth Rs 45 ($AU1) only a few days ago.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) reports food inflation climbed nearly to a year's high of 18.32 per cent on December 25, 2010. A price surge in onions, as well as other vegetables, has been linked to the surge.

Unseasonal rains and consequent crop damage have been blamed for creating a short supply of onions and its price hike.

Meanwhile, foggy weather has affected egg supply chains, with egg vendors and wholesalers reporting price jumps also.

'All the vegetables are very expensive. Tomatoes are very costly. What should we eat and how do we live? Of course, the rising prices are affecting us. We have cut short our menus to half. The government is responsible for this, and not us or the vegetable vendors,' a local, Sita Devi, told Reuters.

India faces a monetary policy review on January 25. The recent increased inflation may leave the Reserve Bank of India (RBI) with no choice but to hike policy rates to contain inflation and inflationary expectations.