After burning its fingers on unprecedented food price inflation, the government is mulling a mechanism to monitor the supply of a slew of items whose prices tend to be seasonal and highly volatile. The idea is to be able to spot a supply crunch at least a few weeks before it actually occurs and take remedial action including a ban on exports well in advance, minister for food and civil supplies KV Thomas told FE.
In a series of meetings over the last few days, the ministry has drawn up a list of items which have, in recent years, shown a tendency to be on the watch list of speculators, and shown extreme volatility, the minister added. Items on this list will be monitored on a weekly basis and any change in production patterns will trigger disincentivising exports of these items, as early as three months in advance. A policy will be unveiled soon.
Thomas said the experience with last month’s onion scarcity had led to this policy. ?It was in September that it was known that some part of the Nashik crop of onions had been ruined. Although the situation was brought under control swiftly, we decided that a monitoring of production and global prices would be a better option,? he said.
Some of the food items which have shown volatility in the past include pulses, sugar, onions, tomatoes and wheat. In fact, sources say that monitoring has already begun with regard to pulses, which saw soaring prices last year and a huge proportion of which India imports from other countries.
?We already know that despite a bumper crop of pulses this year, global trends show that maximum retail price of pulses will go up by nearly 30%. We are prepared to deal with that and policies will be put in place to make sure that our domestic prices do not show a volatility of more than that,? said a senior official in the ministry.