SBI Bank Clerical Special: Special Reading 3: Food – high on price

Food – high on price
Even as the Wholesale Price Index based inflation has reached a 33 year low, the retail food prices have increased by 32 per cent in June-July 2009, as compared to 18 percent rise during the same period in previous year. Prices of many varieties of lentils, sugar, groundnut oil, tea and potato had risen sharply — an analysis of 14 essential commodities collated by the ministry of consumer affairs suggests.

Meanwhile in the time of an elusive monsoon when physical supply of agriculture produce will actually diminish, the significant rise in volume of traded contract in National Commodities and Derivatives Exchange (NCDEX) has added fuel to the price rise. The price rise of agriculture products have attracted speculators away from crude oil or gold to futures trading in agricultural commodity. A heavy speculative activity in this market is now draining the common man’s pocket. There's mounting pressure for strict regulations in futures trading in agricultural commodities so that speculators do not make their coffers heavy by making the poor paying abnormally high prices for food items.

Even the Supreme Court has voiced concern over the current high inflation of food commodities. It has urged the government to take necessary steps to contain it.