India’s wholesale prices, which plunged for the 11th straight month in September, could be masking a worrisome rise in food prices, leaving consumers wondering why their household budgets are spinning out of control despite declining inflation.
Data on the wholsesale price index for September released on Wednesday showed food prices edged up 0.69% year-on-year, even though overall prices fell 4.5% from a year ago.
After onions, prices of pulses — a source of protein for every Indian — are now at a five-year high in some parts of the country. The gap between prices of food articles and non-food items is stark. Pulses shot up 38.56% in September while fuel prices fell 17.71% from a year ago and manufactured goods declined 1.73% year-on-year.
Taking note of the situation, finance minister Arun Jaitley said the government had decided to build a buffer stock of pulses through imports to tackle a spike in prices. He said he hoped to see prices of pulses come down soon as a result of measures taken by the government, including speeding up imports, some of which had arrived.
A series of storms in spring and a back-to-back drought have hit the output of pulses.
“It is very difficult to buy pulses at such a high rate. Who would buy Rs 200-a-kg of arhar dal or toor dal? Even shopping complexes are not offering big discounts on pulses,” said Bhoomika, a Gurgaon resident.
The output of lentils is estimated to have fallen to 17.38 million tonnes in the 2014-15 crop cycle from 19.25 million tonnes in the previous year due to a subdued monsoon and unseasonal rains. Hailstorms in March and April shrunk the area sown by 10 million hectares.
“High inflation for pulses (38.6%) and onions (113.7%) remained the chief concern among food items. The fresh crop as well as the arrival of imports of onions are expected to cool prices in the ongoing month. Given the unfavourable reservoir storage levels in the eastern, western, central and southern regions, the rabi crop as well as food prices will remain vulnerable to the magnitude of rainfall in the coming months,” said Aditi Nayar, senior economist with ratings firm ICRA.
Even in a normal year, India has to import about four million tonnes of pulses, largely through private trade.