Rising food prices won't affect India

Mumbai: Food inflation, which is an important component of the consumer price index, has been under control and is not likely to be impacted by the current high prices globally.

India had a record production of food grain and pulses this season both in kharif and rabi.

It used to import 30 lakh tonne of pulses equivalent to 40-50 per cent of the country’s requirement. Prime Minister had himself signed a contract when he visited Mozambique last year, for the import of 1lakh tonne of tur dal. However, the situation has changed as there has since been an increase in the acerage and yield under pulses.

The glut in the prices of pulses is reflected in the fall in prices that the farmer gets – Rs 3,000-Rs 4,000 per quintal which is even below the minimum support price of Rs 5,050 per quintal. The government had already reduced import duties to zero progressively from a peak of 40 per cent, in the last two months.

Besides, the new wheat crop will start coming in this month from MP and from the middle of April wheat will flow in from UP, Punjab and Haryana.

According to the FAO the food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 175.5 points in February, up 0.5 per cent from January.

The movement in domestic food prices is important as the RBI is watching food prices before it takes its next move on its policy rates.

It had held rates in its last policy as the monetary policy committee headed by RBI governor Urjit Patel had said there was need to watch food prices.