Traders and economists say, the food price inflation rates after peaking at close to 20% in November, cooled to 8% in March, jumping again to 10% this month. Morgan Stanley data through the second week of April show vegetable, milk and sugar prices have all risen from March levels. Unseasonal weather could cause trouble for policymakers who have been struggling to keep inflation in check.
The vegetable and fruit prices have seen sudden spurt in Kashmir with dealers blaming the incessant rains for the hike. Shopkeepers and fruit vendors in Srinagar are selling oranges at Rs 160 a dozen and Saag (a green leafy vegetable) at Rs 50/Kg, which actually sells at a mere Rs 10/Kg.
Director of Consumer and Affairs Public Distribution (CAPD) in Kashmir, Bashir Ahmad, acknowledged that prices of vegetables, fruits had gone up due to inclement weather resulting in shortage of local supply.
Meanwhile, lack of rain in Madurai, the city which owns the biggest mango belt in Tamil Nadu is reeling under intense heat and extremely dry weather which has severely affected the mango crop this year. This has therefore led to a rise in the prices of the king of all fruits, mango.
In another incident of weird weather, unexpected high velocity winds and intermittent showers on the 18th and 19th April, hit wheat production in Uttar Pradesh. Farmers in west Uttar Pradesh suffered a crop loss of 20% as 90% of their crop was still standing in the fields when rain occured.
“Till March, wheat sold at Rs 1,700 to Rs 1,800 per quintal, but prices are likely to go up now. "Wheat would now cost at least Rs 3,000 per quintal," said Bhartiya Kisan Union, Harnam Singh Verma.
It might be slightly early to say that the El Nino will have a major effect on the prices of food commodities. But if that happens and food commodity prices are headed much higher, it would be bad news for consumers and for consumer companies.
The Indian Meteorological Department (IMD) released its Monsoon forecast for 2014 on April 24 and put the Monsoon figure at 95% of the Long Period Average (LPA), with a model error of ± 5%. This corroborated Skymet’s observation of below normal rain during monsoon in India this year, released on the 15th of April.
Photo by Corbis:Demotix