These extra precautionary steps of the government is despite the falling annual inflation rate as measured by the movement of wholesale prices on point to point basis falling to 3 per cent by June 12. Besides, the foodgrains production for this year is also comfortable and in fact is at a record high of 203.5 million tonnes.

The Cabinet Committee on Prices (CCP) is meeting every week under chairmanship of the Prime Minister to take stock of the situation. The states has been advised to set up crop weather watch groups, special price monitoring cells, enforce EC Act when needed and identify items which arelikely to be in short supply and prepare action plans to deal with the emerging situation.

Though the output of onion crop has been better this year and the prices of onions are normal this time, the Centre has placed onions in the list of essential commodities with a view to regulate its stockholdings, movement and prices in times of scarcity. In the last elections to six state assemblies, the BJP was routed due the escalating prices of onions which at one time touched Rs 60 per kg in Delhi. The CCP then authorised Nafed to import 12,000 tonne of pulses in the lean season even though the production of pulses in 1998-99 rose to 15.19 million tonnes.

The joint monitoring committee on prices and availability of essential commodities has already met twice this year under the chairmanship of the department of consumer affairs. The Centre has decided to strengthen the newly launched National Crop Forecasting Centre (NCFC), system of crop forecasting through the use of remote sensing and high power cameras andrevitalisation of state agricultural statistical agencies (SASAs). The committee has recently reviewed the situation in respect of following commodities:
Rice

The production of rice during 1998-99 has been estimated at 84.48 million tonnes compared with 82.3 million tonnes in 1997-98. Total procurement of rice by central and state agencies as on June 7 is 109.28 lakh tonnes (136.93 lakh tonnes previous year). But there is wide price variations in in retail markets of different states.

There has been an increase of 15.3% in WPI of rice over last one year. However, the increase in WPI over the last six months was only 2.2%. Over the last three months, there was a decline in wholesale prices of rice. The availability of rice at present is comfortable and the stocks held by FCI and state agencies are 116.58 lakh tonnes as of May 1.

Wheat Production in 1998-99 likely to touch an all-time high of 73.5 million tonne (69.35 million tonnes in 1996-97). Procurement for the central pool during thecurrent rabi marketing season is 141.09 lakh tonnes on June 8 (120.99 lakh tonnes previous year). Over a period of one year as on May 22, WPI of wheat increased by 14.4% (3.4% 1998-99). In view of the bumper output the government has permitted export of one lakh tonne of wheat this year.

Pulses

Production in 1998-99 is estimated to be 15.19 million tonnes (13.07 million tonnes last year). At present, the estimated gap between demand and supply is over two million tonnes. The gap used to be met to a significant extent through imports. Imports 1998-99 was only 3.13 lakh tonnes (10.08 lakh tonnes). The decline in imports has exerted an upward pressure prices of selected pulses. Prices showed a declining trend during January through April.

However, during last one month prices of pulses are showing an increasing trend due to the beginning of lean supply season.

Vegetables

The increase in vegetable prices during the summer months of April through July is an annual phenomenon due to declinein supplies. Most vegetable prices including onions and potatoes are now normal. Onion prices showed an abnormal increase during July-December, 1998. To prevent any undue rise this year, the government has imposed quantitative ceiling of 1.5 lakh tonne on export of onions up to May. Permission to export from June is subject to availability and prices of onions in the country. Onion production in 1998-99 is estimated at 45.4 lakh tonnes as compared to previous year's 36.5 lakh tonnes.

Prices are likely to remain within limits during the lean supply season of July through October.

Edible oils

Prices have shown a steady trend. Increase in the production of oilseeds during 1998-99 coupled with higher edible oil imports resulted in steady to soft trend. To augment the availability of edible oils the government has placed edible oil imports under OGL and slashed import duty to 15 per cent from from 25.

During 1998-99, edible oil imports were 23.79 lakh tonnes (12.66 lakh tonnes). The government hasdecided to import one lakh tonne of edible oil for allocation to state governments for PDS distribution. State Trading Corporation has so far contracted 30,000 tonnes of RBD palmolien and had a stock of 50,726 tonnes as on May 27. Retail prices of groundnut oil and mustard oil showed a steady trend in the last three months. At present, the supplies of edible oils have been comfortable.

Sugar

During the sugar year (October'98-September'99), production till May 7 has been 143.70 lakh tonnes (122.87 lakh tonnes).

Stocks as of end April 1999 were 118.51 lakh tonnes (108.66 lakh tonnes) The availability of sugar is comfortable and the prices of sugar have shown marginal variation in the last six months.

Tea

Production of tea in the open market is satisfactory. During 1998, production of tea was 870.40 million kg as compared to 810.61 million kg in 1997.

During 199, production of tea up to April 1999 was 109.99 million kg as against 150.88 million kg during the corresponding period in theprevious year. The decline in production during the current year has been attributed to the severe heat conditions prevailed in the north-eastern region which affected the tea gardens. The production is likely to pick up from June 1999 onwards with the commencement of rains in northeastern states and with the onset of southwest monsoon in the southern parts of the country.

The retail prices of packed tea declined by Rs 8 to 12 per kg after the abolition of 8% excise duty on tea packets of 101 gram to 20 kg. The retail prices of loose tea has shown a steady trend all over the country. With the large carryover stocks and picking up of production in June, the overall supply of tea is adequate to meet the domestic demand. Salt

The availability and prices of salt in the country is satisfactory.