NEW DELHI (Commodity Online): ?Aam Adami? is likely to suffer more on account of further price increase in the upcoming festive season due to erratic rainfall and thin stocks coupled with high demand, says the ASSOCHAM's (Associated Chambers of Commerce and Industry of India) paper titled 'food inflation likely to rise in festive seasons'.
The prices of eight essential commodities like condiments & spices, pulses, wheat, sugar, edible oil, tea, coffee and milk have risen by 18% on an average from September 2011 to September 2012 while per capita income of an average Indian went up by 10%, the study noted.
While prices of spices, pulses, wheat, sugar have become dearer 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 about Rs. 42,141/- per annum in FY 2011 went up by about Rs. 4,404/- in 2012, amounting to Rs. 46,345/- per annum. The ASSOCHAM adds that the rise in essential commodities prices and per capita income was utterly disproportionate.
The prices of spices edged much higher from period in September 2011 and have witnessed extremely higher volatility in their prices which 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 be on the rise following a change in the food habits of the people. Winter, which is the season of weddings in North India along with Christmas and New Year, may also lead to an upsurge in demand for the spice, adds the ASSOCHAM analysis.
?The good demand due to upcoming festivals such as Dussehra and Diwali, Inflation has taken several essentials 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 become dearer by 25% to 65%. In addition, prices of milk, ghee, onion, maida, wheat and other items have risen by a minimum of 10% to a maximum of 60%.
During September 2011 and September 2012, Milk prices increased by 26%. The demand for milk is increasing much faster than production and consumption of milk and milk products has significantly gone up in the country.
Apart from the fast increasing appetite of Indians for dairy products, increased cattle feed costs and shortfall in milk procurement during the winter season are the major factors behind the increase in milk prices.
The multiplier effect can be seen on milk products where prices of critical products like ghee and butter have increased respectively during the period. The eating habits have undergone a major transformation with the growing demand for pizzas, where large quantities of cheese and butter are used.
India is the largest consumer of tea; it consumes the largest quantity in the world, accounting for nearly 16% of global retail volume sales. Geographically, tea is widely consumed in the North, East and West of India, and is popular with a wide variety of social classes and consumer age groups. Prices of Tea have increased by 11% from September 2011 to September 2012.
Wheat prices have remained firm on the back of low stocks and high international prices. On a year-on-year basis, wheat prices have increased by 10% from September 2010 to September 2011.
The recent increase in the price of wheat is clearly because of demand exceeding supply a situation arising out of lower market arrivals, lower procurement, decline in the buffer stock below the norm, said Rawat.
All essential pulses have witnessed extremely higher volatility in their prices, which went up to the extent of over 9% between September 2011 to October 2012.
The gap between demand and supply in the country has led to a hike due to dormant production of pulses. Wheat prices have remained firm on the back of low stocks and high international prices.
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