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Tue,Dec152015.0744AMIST

Foodinflationpulsesup
Asthebaseeffectwearsoffinsomecategoriesandunseasonalrainsaffectwintersowing,theprognosisforfoodinflationdoesnt
lookgood
Foodinflation,whichinchedupto6.08%inNovember,isthemain
storyinMondaysConsumerPriceIndex(CPI)data.Lentilswerethe
mainculpritsfortherise.Inflationinpulsesandpulsesproductsrose
toahighof46.08%sincethenewserieshasbeenreleased.
Inflationinthepricesofpulseshasbeensohighinthepastcoupleof
monthsthatthiscategorywhichhaslessthan3%weightinthe
overallCPIhascontributedmoretoinflationthanthemiscellaneous
categorythathasa28.32%weight,pointsoutGauravKapur,
economistattheRoyalBankofScotland.
Pulsescontributedabout1.5%ofthe5.4%riseinoverallinflationin
Novembercomparedwith1.07%ofthemiscellaneouscategory,
accordingtohisestimates.
Photo:PradeepGaur/Mint

Althoughthegovernmenthastakensomemeasurestoprevent
hoardingandimportedsomepulses,thereisstillademandsupply
gapinthecommodity,sayeconomists.Unlikesaywheatorrice,

pulsesdonthaveamplebufferstock.
Whilethekharifpulsescropsowingwasclosetonormalandshouldprovidesomerelief,pricesmaynotmovemuchbecauseofunseasonal
rainsaffectingrabisowing.Thus,theseasonaldipinpricesthatusuallyhappensinDecemberJanuarymaynothappen.Itmayevenruboff
onotherproteincategories.
Thelowerthanusualseasonaldipisnotrestrictedtopulsesevenvegetablepriceshaventsoftenedasmuchasisusuallythecase.
Indeed,vegetablepriceinflationhasswungfromminus8%inJulyto4%inNovember.Ofcourse,thiswaspartlyanticipated.
Althoughtheseasonalmoderationinpricesofvegetablesandfruitsisexpectedtoprovidesomerespite,theElNioinducedshorteningof
wintermaylimitthiseffect,thecentralbankremarkedinitslastmonetarypolicystatement.Thebaseeffecttoohadaroletoplayinthis,with
ahugedownswingthesametimelastyear.
Asthebaseeffectwearsoffinsomecategoriesandunseasonalrainsaffectwintersowing,theprognosisforfoodinflationdoesntlookgood.