Inflation likely to stay stable during festive season, curbs to remain: Food secretary | Latest News India - Hindustan Times
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Inflation likely to stay stable during festive season, curbs to remain: Food secretary

Oct 20, 2023 07:48 AM IST

Food inflation is likely to remain stable during the ongoing festive season and the government will not relax a series of curbs on food commodities, Union food secretary Sanjeev Chopra said

Food inflation is likely to remain stable during the ongoing festive season and the government will not relax a series of curbs on food commodities, such as tariffs and export bans, despite “some adverse impact on trade”, Union food secretary Sanjeev Chopra said on Thursday.

The central government is actively reviewing the minimum export price for basmati, says Union food secretary Sanjeev Chopra. (HT Archive)
The central government is actively reviewing the minimum export price for basmati, says Union food secretary Sanjeev Chopra. (HT Archive)

Without a spate of “timely measures” taken by the government, some of which traders are now opposing, price levels would have been far higher, the official said, citing the ministry’s internal inflation projections.

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“The government is using all tools available, such as (altering) trade policy, duty structures and stocks limits so that prices remain stable. We remain very watchful (of prices),” Chopra said. “While certain sectors of trade have been impacted, government policy is not just for one sector or section but for 1.4 billion people of the country.”

Battling high food prices, the Union government has, over the course of past one year, prohibited wheat and rice exports and imposed limits on how much food traders can stock. It has also introduced a 40% tariff on overseas shipments of onion, while scrapping duties on imports of pulses. These measures are aimed at boosting supplies.

A section of traders has protested that some of the measures are harsh, citing their impact on producer prices and the food industry. Traders of basmati rice have for instance raised a demand to lower the government’s minimum export price (MEP) of $1200 a tonne on shipments of the premium long grain, saying exports had become unviable. Last month, onion traders in Nashik, Asia’s largest wholesale market for the item, went on a two-week strike against an export duty of 40%.

“We have received representation from traders. Based on their requests, the government is actively reviewing the minimum export price on basmati,” the top food ministry official said. MEP is a price threshold below which exporters cannot sell to foreign buyers. It is usually imposed to limit overseas sales.

India has ample stocks of about 5.7 million tonnes of sugar as on October 1 to meet requirements until new harvests start arriving in markets, Chopra said.

“There are various conjectures on sugar output. August was a very dry month, which resulted in stress in cane crops in Maharashtra and Karnataka,” he said, adding: “(Higher output) in Uttar Pradesh will compensate but whether it will fully do so we don’t know at the moment.” The government is yet to come out with its estimates for summer-sown sugar output.

On Oct 18, the world’s second largest producer of sugar extended curb on exports amid industry estimates of a fall in output due to a poor monsoon.

Retail inflation, as measured by the Consumer Price Index, slowed to a three-month low of 5.02% in September from a year ago, led mainly by a decline in vegetable prices. However, cereal inflation continues to be in the double digits for over 12 months now.

A rise in food prices impacts poor households more since they tend to spend a larger share of their monthly budget on food items compared to other expenses.

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  • ABOUT THE AUTHOR
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    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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