1. Relief for Centre, as rice, wheat, arhar, potato prices stable despite demonetisation

Relief for Centre, as rice, wheat, arhar, potato prices stable despite demonetisation

Nearly three weeks after the government’s demonetisation move, retail prices of major agricultural commodities such as rice, wheat, arhar, potato and onion have largely remained stable.

By: | New Delhi | Updated: November 29, 2016 6:14 PM
Experts say this has been possible because there has not been a large-scale supply disruption of these commodities. (Reuters) Experts say this has been possible because there has not been a large-scale supply disruption of these commodities. (Reuters)

Nearly three weeks after the government’s demonetisation move, retail prices of major agricultural commodities such as rice, wheat, arhar, potato and onion have largely remained stable. Experts say this has been possible because there has not been a large-scale supply disruption of these commodities.

According to data from the department of consumer affairs, the prices of key agricultural commodities in Delhi, Mumbai, Kolkata, Bengaluru and Hyderabad between November 9 and November 27 have not seen volatility. Especially because of sufficient stocks of perishable agricultural commodities such as potato, onion and tomato, the prices have remained largely stable during the last few weeks.

commodity

However, traders said retail wheat prices have seen a marginal increase across key cities in the last two weeks or so because of depleting domestic stocks. In a bid to increase domestic supplies through imports, the government had recently slashed import duty of wheat from 25% to 10%.

Even the prices of tur or arhar dal, which witnessed a sharp spike over the past few months, have stabilised in the last few weeks. The expectation of a bumper kharif harvest has also stabilised the prices.

“We are getting supplies from the farmers daily despite the cash crunch and settlement in payment is being done through cheques, cash or the credit route,” Raj Kumar Bhatia, general secretary, chamber of the Azadpur Fruit and Vegetable Traders Association, told FE.

He further said supplies of new notes have increased in the last one week, though there has been a 10% drop in arrival of fruits & vegetables (F&V) in the country’s biggest wholesale market.

“Although there are marginal difficulties being faced by farmers, the supply line for fruits, vegetables and milk has not been disrupted because of the cash crunch. There has not been any abnormal spike in prices of essential commodities which implies much of the transactions is done in credit,” Ashok Gulati, former chairman, Commission for Agricultural Costs and Prices (CACP), had recently said. He also said rabi sowing of crops has also not been disrupted.

Meanwhile, according to data released last week by the agriculture ministry, sowing of rabi or winter crops has picked up slightly.

The government’s recent decision to allow farmers to buy seeds using old Rs 500 denomination notes has helped. The total area under the major rabi crops — wheat, pulses, oilseeds — till November 25 was 32.7 million hectares, which was more 4.61% higher than the same period last year. A week earlier (till November 18 ), the area under rabi crops was lower than previous year.

Besides allowing the farmers to buy seeds from state-owned companies using the old Rs 500 notes, the government last week had announced that it will provide Rs 21,000 crore to district central cooperative banks (DCCBs) through Nabard to provide loans to farmers to meet their credit requirements during the winter crop season.

The government has directed the states to ensure that farmers do not face difficulties in purchasing fertilisers because of the cash crunch. “States have been directed to ensure that all the cooperative societies, private retailers or wholesalers provide fertilisers to farmers through all modes of payments like on credit as well as through credit card, debit card, cheque etc,” fertiliser minister Ananth Kumar had said last week.

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