Inflation is down to –1.2 per cent but does one really care about a minus statistic when the monthly budget on basic meals shoots up by more than 25 per cent in a year? Prices of vegetables and pulses are on an upward trajectory, worrying many a household.
Agricultural economists feel that if monsoon is good over the next one month there could be a correction in prices, but speculative traders have meanwhile been betting on high prices in anticipation of a lean season.
“The price rise is much on anticipation of a weak produce and people are building stocks. A good monsoon should result in sharp correction of prices,” said an economist at a commodity exchange.
There has been a significant rise in the sown area of all crops in the kharif season as on July 10 over the previous week but experts are of the view that to rely on that would be premature.
Pulses remain an area of concern as prices have gone up significantly on account of shortage. Arhar (tur) prices are up almost 35 per cent over the last year and urad prices are up over 22 per cent. Chana (gram) is short in supply since it is produced in the rabi season. It has witnessed a sudden spurt in prices. Over the past couple of weeks, chana prices have moved from Rs 2,100 per quintal to close to 2,500 per quintal.
“The monsoon will have to be active for a while to give confidence to traders as a rise in area sown can’t raise the traders confidence on its own,” said Kishore Narne, head of commodities at AnandRathi.
Economists say the government does not carry stocks, as a result of which it cannot intervene to stabilise prices. A weak rupee has also raised import costs.
Experts are of the view that there is not much pressure cereals and edible oil. Wheat stocks are adequate. However, vegetables, especially potato, have been bit by delayed monsoons.