Edible oil, sugar prices may jump 15% this festive season

Retail prices of essential commodities like sugar, edible oil and pulses may jump by 15 percent in the coming festive season due to rising demand and poor rainfall affecting output, a study has said.

“Consumers are likely to feel the pinch of rising food prices in the upcoming festive season due to shortage of rainfall in crop growing areas,” Assocham said in a study. The study said increase in demand could push up prices by 15 percent during this season compared to same period last year, it added.

Monsoon deficiency is 12 percent so far and sowing of kharif crops like coarse cereals and oilseeds has been hit. Besides, four states-Karnataka, Maharashtra, Gujarat and Rajasthan have declared drought in more than 390 taluks.

“Traditionally, the demand for such commodities increases with the onset of festivals like Durga Puja, Diwali and Christmas. But this year, the production is also expected to be affected due to less rains,” Assocham Secretary General D S Rawat said.

Further, it said during 2012-13, sugar production is expected to be lower at about 25 million tonnes as states like Maharashtra and Karnataka have received less rains so far this year.

It said edible oil demand by biscuits and snacks manufacturers and restaurants may further increase at the retail level by 10-15 per cent in the festival season due to demand-supply gap.

The study said further rise in rates could have an adverse impact on food inflation. Besides, it said prices of pulses may rise due to fall in pulses acreage. The prices have increased by up to 15 percent in the recent few months.

Besides, the chamber said the main reason for high price of milk is fodder scarcity and export of cattle fodder. The study said price of milk and milk-based products is set to surge. In the last one year, milk price rose by 25 percent.

PTI