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Govt reviews spike in prices of food items

business Updated: Mar 31, 2008 23:29 IST

The government met to review the sharp increase in prices of food items and other manufactured goods on Monday, with a view to check runaway inflation that has touched a 13-month high of 6.68 per cent.

The Cabinet Committee on Prices, among other options, will look at further cuts in duties on import of essential commodities to cool inflation.

The wholesale price index-based inflation rate grew by 6.68 per cent for the week ended March 15.

The government also called a meeting of the three national commodity exchanges today to seek their views on whether a few more essential commodities like potato and edible oils be banned from the futures trading to check prices.

The consultations with the commodity exchanges were held by the Ministry of Consumers Affairs, at the behest of the Prime Minister's Office, sources said.

Meanwhile, the Congress, which heads the multi-party UPA government, decided to ask the government to ban futures trading in more farm items to keep prices under check. Futures trading is already banned on staple commodities like rice, wheat and pulses - urad and tur.

AICC Media Department Chairman M Veerappa Moily said that inflation was a global phenomena and cited China's example where the general price line grew by 8.7 per cent for February this year -- its highest in the last 12 years, with the country witnessing a "staggering" rise in pork and vegetable prices.

However, the three commodity exchanges -- MCX, NCDEX and NMCE -- are learnt to have stated that the ban on futures trading of wheat, rice and few pulses last year has not helped ease pressure on prices.