Developing

Potato Prices Witness Record Hike of 92% In A Year, Onions Too Cost More

The average retail prices of all essential food items, except that of wheat, have increased in the past one year with potatoes witnessing the steepest rise of 92%, followed by onions at 44%. High food inflation has emerged as a policy worry although experts say it is temporary and will taper off as supplies improve. The comparative analysis of data by the consumer affairs ministry shows that in average wholesale prices, potato prices have gone up by 108% in the past one year from Rs 1,739 per quintal to Rs 3,633 per quintal. The wholesale price of onions as on Saturday was Rs 5,645 per quintal compared to Rs 1,739 a year ago, an increase of 47%. Along with the two kitchen staples, pulses have emerged as a major worry for household budgets. For the past few months, the trend was also captured in wholesale and retail inflation numbers, which showed how food prices were exerting pressure on the overall numbers. The comparison of retail potato prices of the past five years also shows that there has been a 158% increase from Rs 16.7/kg to Rs 43/kg. Sources said though the government has the option to impose a stock limit on potatoes, if prices increase further, it would first take all possible measures, including import of potatoes, to put a check on prices. Both retail and wholesale price inflation data have shown the impact of high food prices, particularly of vegetables, meat & fish and pulses. The Reserve Bank of India has paused its interest rate cutting cycle due to the sticky inflation numbers. “While inflation has been above the tolerance band for several months, the MPC (monetary policy committee) judges that the underlying factors are essentially supply shocks which should dissipate over the ensuing months as the economy unlocks, supply chains are restored, and activity normalises,” the MPC said in its statement earlier this month. The central bank has said that pressures on prices of key vegetables like tomatoes, onions and potatoes should also ebb by the third quarter with kharif arrivals. On the other hand, prices of pulses and oilseeds are likely to remain firm due to elevated import duties, the RBI has said.

 

 

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