India Food Prices Climb 19.95%, the Most in 11 Years

by Dave

Instead of making meaningful policy changes, politicians are likely to respond by imposing price controls, banning futures trading and exports, making the problem worse. Proving Groucho Marx right: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.”

With peak oil at hand, and rising energy prices for the foreseeable future, food inflation is only going to get worse.
Community and rooftop vegetable gardens as in Cuba needs to be considered for certain Indian metros, and with space constraints rooftop would seems like a preferred option.

India’s wholesale food prices rose at the fastest pace in eleven years, making it more likely that the central bank will raise borrowing costs to curb inflation. An index of food articles compiled by the commerce ministry increased 19.95 percent in the week ended Dec. 5 from a year earlier. Potato prices more than doubled in the week ended Dec. 5 from a year earlier, vegetable costs climbed 41.09 percent, the price of pulses rose 40.1 and wheat gained 13.9 percent, today’s report showed.

Policy makers in Asia have started to exit monetary stimulus as the global economic recovery causes the focus to shift from reviving growth to fighting inflation.

Opposition lawmakers yesterday accused the government of being ineffective in tackling soaring food prices and disrupted parliament, forcing the speaker of the lower house to adjourn for the day.

A panel of Indian lawmakers said in a report presented to parliament today that the government “failed to intervene” in a timely manner to address this “burning issue.” The standing committee of finance demanded a probe into the surge in sugar prices and suggested developing a mechanism to provide food items directly to consumers to overcome hoarding.

India’s inflation is accelerating as the weakest monsoon since 1972 and floods in some parts of the country hurt farm output and caused shortages. Varma expects inflation to accelerate to 8 percent by March 31, more than the central bank’s 6.5 percent estimate.

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