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Delhi worst hit by rising food prices among metros

As per experts, the maximum surge in food prices is witnessed in Delhi followed by by Kolkata, Mumbai and Chennai.

business Updated: Apr 06, 2008 23:40 IST

Life in the four metros is getting tough for poor and middle class consumers, with their budget for grocery and other food items having shot up by almost 40 per cent in the last one year.

The maximum surge in food prices was witnessed in Delhi, followed by Kolkata, Mumbai and Chennai, according to an analysis of retail prices of 14 essential items maintained by the Ministry of Consumer Affairs. "Ideally, there should not be much difference in the prices of food items across metros," farm scientist M S Swaminathan said.

Rising purchasing power coupled with a mismatch in the supply-demand situation were pushing prices through the roof in all the four metros, he said, adding, the volatility in global food prices was spilling over to domestic rates.

According to the data, retail prices of onion, gram, rice, sugar, groundnut oil and vanaspati were the highest in Delhi among all the metros on April 1.

“Delhi is worst hit by the price rise among the metros because it does not have a connected hinterland for food supply. With the rise in oil prices, logistics and transportation costs are fueling food prices further,” FICCI Secretary-General Amit Mitra said. Besides, the changing food habits on account of rising incomes had also exacerbated the spike in prices, he added.

In the National Capital, prices of edible oil and pulses shot up by 20-35 per cent in the last one year. Groundnut oil rose to Rs 121 per kg on April 1 in Delhi against Rs 92 per kg in Kolkata, Rs 91 in Mumbai and Rs 78 in Hyderabad. Prices of items like onion remained the highest in Delhi at Rs 10 per kg at the beginning of the month. Meanwhile, in Mumbai, wheat, atta and sugar prices surged the most. Wheat rates went up by 24 per cent to Rs 15.5 per kg.

In south India, where rice is the staple food, prices have a shot up by over 40 per cent despite Andhra Pradesh and Tamil Nadu being the largest producers of grain in the country. Rice in Chennai has become costlier by Rs 4 per kg.

Commenting on rising prices, HDFC Bank Chief Economist Abheek Burua said, "Food items are priced at higher levels in metro cities because of better purchasing power of the people." Whether in smaller cities or metros, there would always be local variation in prices, he said.