28
May
Posted by smcinvestmentindia in agriculture, Business, commodity, Commodity market, Commodity Trading, commodity update, Economy, smc capitals, SMC Depository, SMC Global, SMC online trading, SMC Research Based Advisory Services. Tagged: farm sector growth, Food inflation, food prices, Foodgrains, fruits, fuel price, Kharif, kharif season, Planning Commission, Rabi arrival, Rabi Crops, RBI, vegetables, wheat production. 4 comments
Food price index rose 16.23 per cent in the year to May 15.
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The fuel price index climbed 12.08 per cent.
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Meanwhile, the speed of rise in food prices slackened from the previous week”s annual rise of 16.49 per cent.
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The fuel price inflation also slowed to 12.08 per cent from the previous week”s 12.33 per cent.
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The primary articles index was up 15.90 per cent, compared with the previous week”s annual reading of 16.19 per cent.
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Wholesale prices, however, eased in line with expectations to 9.59 per cent in April from a year earlier.
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This in turn provided further evidence that the RBI will hold off from raising interest rates at least until its next scheduled meeting in July.
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Earlier, Planning Commission Member Abhijit Sen stated that food inflation is likely to decrease to 4 to 5 % by November.
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This is from the current over 16 % after the arrival of Kharif (summer) crops.
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Meanwhile, he added that farm sector growth will be altered upwards to 0.2 % in 2009-10.
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This, however, is from the earlier estimate of minus 0.2 %.
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Prices have started falling from March after good Rabi arrival.
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Moreover, for some commodities such as onion and potatoes, the decline is very sharp.
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But, however, the overall prices are very high and after Kharif season, prices will commence to decline.
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He also said that it is quite possible food inflation will decline to 4-5 % by November this year.
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On the other hand, experts had predicted a decrease in food inflation with the arrival of Rabi crops in April.
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Mainly due to high prices of vegetables and fruits, food inflation carried on increasing and rose to 16.49 % for the week ended May 8.
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Prime Minister Manmohan Singh had expressed optimism that overall inflation would decline to 5-6 % by December.
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In addition, on farm sector growth, Sen said growth is expected to be 0.2 % in 2009-10.
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This is due to the upward revision in production in third advance estimate.
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In 2010-11, the farm sector growth is likely to be 5-6 % if met department forecast on monsoon comes true.
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Foodgrains production has been revised upwards to 218.19 million tonnes from 216.85 million tonnes quoted in the second advance estimate released in February.
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Wheat production is projected at a record 80.98 million tonnes in 2009-10.
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