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The Finance Ministry, in its recently released monthly economic review, has said that the government expects food prices to come down after the monsoon. The reason for this is that the Indian Meteorological Department (IMD) has predicted more monsoon than normal this time. The report said that above normal rainfall will result in higher crop production. In its monthly economic review, the Finance Ministry further said that food prices are expected to soften as the IMD has forecast above normal rainfall during the monsoon this year. With this, there is every possibility of better distribution and more production of rain water.
Food inflation stood at 8.5 percent in March
Food inflation in India declined to 8.5 percent in March from 8.7 percent in February. The high level of food inflation is mainly due to increased prices of vegetables and pulses. The government has taken steps to control their rising prices. These include setting stock limits to prevent hoarding, strengthening buffer zones of staple food items and releasing them in the open market from time to time.
Preparation to buy pulses from Brazil-Argentina
The government has facilitated the import of essential food items by streamlining supplies through reputable retail outlets. According to government sources, the government has started talks with new markets like Brazil and Argentina for long-term contracts for import of pulses. Twenty thousand tonnes of urad will be imported from Brazil and negotiations to import tuvar from Argentina are almost in the final stages. The government has also signed agreements with Mozambique, Tanzania and Myanmar for import of pulses. Regarding vegetables, CRISIL report says that the prices of vegetables will come down after June.
RBI MPC expressed concern over rising food prices
Earlier, the Monetary Policy Committee of RBI had expressed concern over the rising prices of food items. However, the MPC said the record Rabi season crop will help bring down food grain prices. The MPC said uncertain weather events proved to be a shock to food prices. It is influenced by geopolitical tensions and oil prices. According to the MPC, as the IMD has predicted a better than normal monsoon this year, prospects for the early-stage kharif crop also look good. It is noteworthy that high inflation rate is a big challenge for the major economies of the world.
IMD has predicted more rainfall than normal
IMD has predicted above normal monsoon in 2024. This will bring good rain. Which is a good sign for vegetable prices, but the distribution of monsoon is also important. IMD expects above normal temperatures during June, which may push up vegetable prices in the next few months. In the month of March this year, the inflation rate of vegetables has come down to 28.3 percent from 30 percent in the month of February.