A big reason why retail prices of fruits and vegetables have not shown an appreciable decline despite good rabi harvest is that truck freight rates, which constitute a major portion of the final price that a consumer pays, have risen by 20-25% in the last five-six months.
If that?s not all, a report by the Indian Foundation of Transport Research and Training (IFTRT) said that truck rentals will continue its upward swing in the next few months as well due to rise in volume of order and lack of availability of new fleet on the road.
In April alone rentals rose by 1.2% to 1.8% and their rise will continue till August-September, IFTRT said.
?Due to global economic crisis, nobody was interested to put new fleet in the market last year leading to shortage of truck for transportation which kept prices high. There was a 20-25% hike in truck rental in the past five-six months, said SP Singh, senior fellow & coordinator, Indian Foundation of Transport Research and Training. The likely rise in truck tyre prices could also fuel the truck transportation prices, Singh added.
Speaking to FE, Singh said, ?This year, because of bumper production of wheat and good crops of sugarcane in the country, a large number of trucks were diverted towards the procurement and they are getting higher rentals due to seasonal demand. After wheat, it will be mangoes and then apples. This thing will continue till August-September. So, truck rentals will be firm till August-September.?
A further rise in prices of fruits and vegetables and essential commodities could impact food inflation of the country which had dropped to 16.04% during the week ended April 24, still above 15%, the margin last crossed in November 2009. The WPI-based inflation is also still hovering around 9%, way above the RBI?s comfort level.