Government mulls stringent steps to curb rising food prices
Govt is ready to ban futures trade in volatile commodities, release grain, pulses through ration shops to contain rising food price, says K V Thomas.
NEW DELHI | KOLKATA: The government is ready to ban futures trade in volatile commodities, impose limits on stocks that traders keep and release grain, pulses and edible oils through ration shops to contain rising food prices, Food Minister KV Thomas told ET.With prices of vegetables and grains rising up to 50% in the past month because of an abnormally low rainfall, the government wants to prevent traders and punters from making a quick buck on account of the weak monsoon rains.
The government cannot do much to control prices of fruit, milk and vegetables but it plans to initiate long-term steps such as improving cold-storage facilities, he said.
Thomas said the government would step in effectively to contain prices, and has asked the commodities market regulator to submit a report on the rise in futures prices and the actions that can be taken to calm prices.
"We will ensure steady supply of food grains, sugar, pulses and edible oil to contain prices," Thomas told ET.
Prices of all food items from staples like wheat, sugar, cooking oil and pulses to dry fruits, onions and tea are rising because of a poor rainfall and the expected seasonal surge in demand during festivals such as Ramzan and Raksha Bandhan.
Fruits too have become costlier by 15%-20% as the demand has shot up due to the ongoing Ramzan period.
Tur dal has again hit 100/kg in Delhi grocery shops. At the wholesale market, tur dal prices have firmed up to 70/kg from 62/per kg due to delayed sowing across Karnataka, Maharashtra, Andhra Pradesh and Gujarat.
Wheat prices in Delhi market are ruling at Rs 1,285 a quintal compared to Rs 1,200 a quintal 20 days ago. Prices of dates, which see a heavy demand during Ramzan, have increased by 5% compared to the previous year.
Sugar prices have jumped Rs 3/kg within a week due to speculation of a shortage.
On Tuesday, the sugar price in wholesale Vashi market near Mumbai was 3,621/quintal for M-30 sugar and 3,541/quintal for S30 sugar, highest in the last 15 months.
Sugar production in top producer Maharashtra is expected to decline due to drought-like conditions in the cane-growing region.
Vedika Narvekar, senior research analyst (agri commodities), Angel Comtrade, said: "The festive season demand and a dry weather in the country are not only the reason why prices are pushing. International commodity prices, which have surged ahead in the recent past, are impacting prices in the domestic market as well. We do not see an immediate fall in prices unless weather situation improves in producing markets."
"The millers are buying wheat on a monthly basis as per their requirement. Now with the exporters entering the market across Rajasthan, Uttar Pradesh, Gujarat and Madhya Pradesh, prices have surged," said Raj Sood of Sood Brothers firm in Khanna mandi of Punjab.
Tea prices have jumped by 20%-25% in the last one month as demand has risen in western and northern India. Prices of good quality CTC teas are hovering around 170 per kg as compared to 145- 150 per kg a month ago.
Retail potato prices have remained firm at 20 a kg but consumers are fearing a further increase owing to the ongoing festive season.
"Potato prices will remain firm this season. Delayed harvesting of the crop in Karnataka and Maharashtra and a smaller harvest in Himachal Pradesh and Uttarakhand are the key reasons," said Sachid Madan, director, Technico Agri Sciences.
Prices of stored onion have started increasing gradually in the anticipation of a delayed kharif crop. Presently, modal prices in the onion producing markets range from 550/quintal to 650/quintal and in consuming markets, they range between 750/quintal and 1,100/quintal.
The government has already pumped in additional 5 lakh sugar in this quarter to rein in rising prices and meet festive demand. It has also promised to meet additional food grain demands of various states from the central pool. It has released 2 million tonne of grains out of 5 million tonne.
(With additional reporting by Madhvi Sally and Jayashree Bhosale)