Indian food prices have hit their highest level in more than a year, rising at an annual rate of 18 per cent in what economists have taken as a worrying sign that the impact of surging commodity prices is hitting the broader economy.
Food inflation in India is being driven by many of the same factors that have pushed the price of global commodities such as wheat and barley to record highs. It also highlights rising fears of a broader crisis in the developing world, with the UN’s Food and Agricultural Organisation warning this week that global prices had surpassed levels seen during the 2007-08 crisis.
India’s commerce and industry ministry said on Thursday that food prices rose at an annual rate of 18.32 per cent in the week to December 25.
The move capped more than a year of double-digit food price inflation for India, where millions still spend more than 50 per cent of their household income on food.
For Chhaya Singh, a 17-year-old student shopping for daily staples in Mumbai’s Colaba market, that has meant that even the cheapest and most basic meal of potato curry has become too expensive.
“We have to find alternative vegetables,” he said.
For Nahi Chaudhary, a 38-year-old Mumbai housewife, the higher prices have meant buying fewer aubergines, okra and other now-expensive vegetables. “The increase in price is terrible,” she said. “In fact we don’t eat out at all any more as restaurants have even increased their charges.”
Although still below the more than 20 per cent inflation levels seen in 2009, economists fear that a long-term structural shift in food consumption means that prices are likely to be an ongoing concern for politicians and the Reserve Bank of India, the central bank.