Saturday, Nov 01, 2014

Summer spike in vegetable prices a norm, not aberration

A careful analysis of the trends in retail prices of key vegetables show that price rise in summer is the norm. (Reuters) A careful analysis of the trends in retail prices of key vegetables show that price rise in summer is the norm. (Reuters)
ENS Economic Bureau | New Delhi | Posted: July 2, 2014 1:21 am | Updated: July 2, 2014 9:01 am

The Centre has called a meeting of state ministers on Friday to hammer out short- and long-term solutions to battle increase in prices of vegetables, especially onion and potato.

But a careful analysis of the trends in retail prices of key vegetables show that price rise in summer is the norm for all of them.

Since May 1, 2014, there has been a jump between 6 per cent and 50 per cent in potato prices in five cities — Jammu, Ahmedabad, Kolkata, Hyderabad and Bangalore.

But, as the chart shows, last year this jump was reserved for tomatoes. During the corresponding period in 2013, potato prices remained flat. Onion prices have jumped between 25 per cent and 100 per cent, with the minimum rise reported in Jammu and the highest in Kolkata. Conversely, potato prices have risen the most in Jammu and the least in Kolkata, showing that these jumps are based on local factors than any endemic shortage.

Last year, tomato prices in summer rose 500 per cent in Kolkata and 171 per cent in Hyderabad . Year-on-year, the price rise has turned negative in these two cities. However, in Bangalore, tomato prices have risen by 50 per cent.

Prices of wheat and rice, which have centralised procurement, are, however, stable across the country.

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Reflecting the short-term concerns, the agenda paper for the ministerial-level meeting notes: “The prices of some of the commodities, especially onion and potato, are a matter of concern. It is very urgent to discuss the measures to be taken to address the issue. Steps to prevent hoarding of these commodities and plans for distribution of specific essential items through public channels and improving other supply channels will be discussed in the meeting.”

Noting the concern finance minister Arun Jaitley accepted the mounting pressures but assured there is enough stock of food grains, “Our challenges are compounding with uncertain monsoon and Iraq crisis …. We have huge amount of food grains, so no concern on that side.”

The Indian Express, tracking data across major consumption centres of pan-Indian vegetables, found that potato prices are up between 41 per cent and 100 per cent and that of onions is higher by up to 40 per cent. But year-on-year, while the price rise is highest in Jammu at 100 per cent, it is 42 per cent in Kolkata.

The prices soften as monsoon spreads across the country. The Friday meeting with the state food ministers will be chaired by Jaitley and attended by agriculture minister Radha Mohan Singh and minister for consumer affairs Ram Vilas Paswan.

In a letter to chief secretaries of states, consumer affairs secretary Keshav Desiraju has said, “Action need to be continued…

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