Inflation will start declining soon, says Food Ministry
New Delhi, May 1 (PTI) The measures taken by the government to rein-in prices of essential commodities will start showing results and inflation will start coming down soon, a senior Food Ministry official said today.
Ruling out any crisis in wheat availability in the wake of the decision to import one million tonnes of the foodgrain, the official said though food ministry has asked STC to gear up for three million tonnes of wheat, if required, more imports were unlikely at this point in time.
"We do not want the price line of the wheat-growers to be affected due to additional imports as such moves would put them in a disadvantageous position," the official said.
Prices of wheat, rice and sugar were stable and measures taken by the government will "start showing the base affect shortly" and decline, he said.
On pulses, the official said prices would also stabilise following the decision to permit duty free import of 1.5 million tonnes of the commodity.
With 1.8 million tonnes of pulses (both by government and private traders) already been imported during 2006-07, higher imports this year would supplies comfortable, he said.
The government is hard pressed for additional import of pulses this year due to non-availability in global markets.
Though the weightage for vegetables and fruits is low on the inflation computation basket, its prices have declined, the official said.
The wholesale prices of vegetables, which shot up by over 23 per cent during the first week of April, has since declined by five per cent in the second week of the month.
The Agriculture, Food and Consumer Affairs Ministry is, however, concerned over the rising trend in global prices of farm products and is monitoring its impact on domestic prices.
Inflation based on wholesale prices stood at 6.09 per cent during the week ended April 14.
India is facing an estimated shortfall of 3.61 million tonnes of pulses. As per the third advance estimates for 2006-07, pulses production is likely to increase by 5.3 per cent at 14.10 million tonnes against the projected consumption of 17.71 million tonnes.
Import by private traders stood at 16.95 lakh tonnes till 2006-end while state-owned companies have contracted 1.03 lakh tonnes till March 8, 2007.
Wheat production is slated to touch 73.7 million tonnes during 2006-07 as against 69.35 million tonnes in the previous year. It is feared the wheat crop held up due to slow harvesting will lead to a fall in its prices in the coming weeks when the remaining standing crop enter the market.
Excess sugar availability has already started showing its effect on the prices front with the sweetner now selling cheaper in the retail market.
To protect the interest of sugarcane growers, the government is now incentivising exports. Sugar production is likely to cross 260 lakh tonnes in 2006-07 sugar season ending September as against 192 lakh tonnes last year.