With the rate of inflation declining below 6% last week and expectation of a record foodgrains harvest this year, the prices of essential food items such as rice, sugar, potato, mustard oil remained largely stable during last three months. However, the prices of onion and wheat has risen in the last four months. Sugar prices shows a rising trend because of fall in production and low inventories with millers.
According to an analysis by FE of the wholesale price in Delhi during October 2008 ? January 2009 suggest that while the price of standard parmal rice has remained stable at Rs 1,200 per quintal, the prices of wheat has gone up marginally from Rs 1,050 per quintal in October 2008 to Rs 1,135 per quintal in January, 2009.
The trend reflects the ground realities as the government moves towards another bumper foodgrains production, which is essentially driven by wheat and rice production. Union agriculture minister Sharad Pawar said that food production is expected to cross 230.67 million tonne mark achieved during 2007-08.
According to first advance estimate for kharif 2008-09 season released few months back, the government had indicated that the rice production during 2008-09 is expected to be 83.25 million tonne against 82.81 million tonne.
With the state owned Food Corporation of India having huge wheat and rice stocks, the retails prices of these commodities remain stable. ?Due to comfortable stock position and a positive crop outlook, the prices of wheat and rice are expected to be stable,? a food ministry official said.
The wholesale price of sugar in Delhi saw some volatility as its price rose to Rs 1,950 per quintal on January 1, 2009 against Rs 1,800 per quintal recorded in December 2008. The potato prices crashed from Rs 829 per quintal in October 2008 to Rs 205 per quintal by January 2009. Bumper production of potato is attributed to fall in potato prices.
Due to delay in arrival of kharif onion crop from Maharashtra, the onion prices are looking northward during the last four months. Onion prices have risen from Rs 811 per quintal in October 2008 to Rs 1,240 per quintal early this month.