Sugar turns bitter as inflation shocks
Retail inflation has gone up for the first time since January this year. The real culprit, however, is sugar and vegetables.
According to the data provided by Ministry of Statistics & Programme Implementation on May 12, 2016, inflation in sugar and confectionery products for the month of April stood at 11.18%, second only to pulses, at 34.13%. The price rise in sugar for the rural and urban markets stood at 7.36% and 19.10%, respectively.
The Consumer Food Price Index (CFPI) rose 6.58% in rural and 5.97% in urban areas taking the total price rise to 6.32% as against general inflation of 5.39%. This means that price rise in food products, like fruits, vegetables, sugar, etc has been more than the price rise in other products and services.
According to Sujan Hajra and Moumita Paul Samanta of Anand Rathi Research, in a report dated May 12, 2016, “While fuel inflation declined from 3.5% to 3%, food inflation rose sharply, from 5.1% to 6.3%. This arose due to the noticeable hardening of vegetable inflation (from 0.5% to 4.8%) and of sugar (from 3.9% to 11.2%).”
CARE Ratings, too, seconded Anand Rathi. It said, “The food basket has contributed to this increase.”
The ongoing heat waves and acute water shortages seem to be impacting both actual and anticipated food supplies said Anand Rathi research paper.
Will sugar turn sweet?
Analysts and industry experts believe that the price rise is temporary and with the expectation of a good monsoon this year, food, vegetables and sugar prices are likely to come down in the near future.
Hajra and Samanta of Anand Rathi said,”While the high temperatures and water shortages in various parts of the country are issues of grave concern and could keep certain food prices elevated for a short period, a good monsoon could reverse these.”
CARE Ratings said, “Given the monsoon forecast, the CPI inflation rate will not cross 6% but will continue to range between 5-6% for some time.”
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
SIP Returns: How Rs 3,000, 5,000, and Rs 10,000 SIPs can help you build retirement corpus of Rs 1.06 cr, Rs 1.77 cr, and Rs 3.53 cr
Gold and Silver rate today (May 14, 2024): Precious metals trade in green; yellow metal above Rs 72,000 once again, white metal near Rs 85,350
RCB vs CSK IPL 2024 Ticket Booking Online: Where and how to buy RCB vs CSK tickets online - Check IPL Match 68 ticket price, other details
Top 7 SWP Mutual Funds: Rs 50 lakh investment, Rs 70K monthly pension for 10 years, and Rs 42.30 lakh balance value; know more details
TBO Tek IPO Listing LIVE Update: Bumper Debut! Share list at 55% premium - Buy, sell or hold? Check Anil Singhvi's view
11:10 AM IST