With the arrival of rabi crops in the domestic market, the government expects food inflation rates to stabilise in the country

Consumers can now heave a sigh of relief as the prices of agricultural food products have dropped in the last 2 months with the arrival of rabi crops. As a result, high prices of food products are expected to stabilise this year.

According to estimates, the production of rabi crops such as onion, potato and wheat have dipped, thereby leading to a drop in the retail prices of food items. In certain states onions are being sold at Rs 1-2 per kg, whereas in Navi Mumbai tomatoes are available at wholesale exchange of Rs 7 per kg.

It has been estimated that wheat production will hover around 82-83 million tonnes (mt) in 2010, as compared to 80 mt last year. As a result, there has been a significant fall of 24% in the wholesale price index of wheat this year. Experts expect that food inflation, which currently stands at 14.1%, would most likely start declining after April 2010. With the high buffer stocks of rice and wheat held by the government, the prices of these food commodities are likely to dip in the coming months.

“The buffer stocks should be made available to consumers through the Public Distribution System, which will aid in bridging the gap between food supply and consumer demand in the country,” says Ravi Purohit, proprietor of Purohit Suppliers, a small-sized food grain manufacturer in Mumbai.

Measures to be undertaken

Despite the drop in the food inflation rates, prices of certain food items continue to remain high. “The government should implement certain measures such as providing subsidy to farmers so that they can purchase latest equipment and organic and inorganic nutrients that will further bolster crop production,” says Madhavan Deivasiga Mani, director of Natura Bio Tech, a mid-sized food grain dealer and trader in Chennai. Hoarding of food grains should be checked by the government in order to prevent the chances of short supply leading to hike in the prices of food products in the country.  

Sabrina Mitchell