More-than-expected rains, falling rupee heat up prices of key food items: Report

In the previous two weeks, prices of some key staples such as tomatoes, mustard and sunflower oil, rice have surged around 50 percent

The prices essential food items have risen significantly in the last one month, hitting the pockets of Indian households, a report by the Economic Times said on August 6.

The prices were mainly driven by unexpected jump in monsoon rains, a weakening rupee and lower crop production, the newspaper said.

Edible oils, rice, flours and vegetables have recorded sharp increase in the prices, ET said citing retail and agribusiness executives. In the previous two weeks, prices of some key staples such as tomatoes, mustard and sunflower oil, rice have surged around 50 percent, the report said.

Moreover, prices of wheat flour, refined flour, semolina and sugar have gained at least 6 percent in the last one month and are higher 8-12 percent on-year, the paper said.

The price of imported edible oils have jumped on sharp fall in the rupee in the last few weeks, the report said.

The jump in food prices will also be among the key issues the Reserve Bank will likely take a look before arriving at its decision on repo rate at the August 6 MPC meeting.

In June, the country’s inflation dropped to 2.1 percent, which was below the central bank’s target for five straight months. A good monsoon and positive sowing progress are likely to keep the price surge below RBI’s projection of 3.7 percent in the current financial year.