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By Rahul Goswami
Hard data now shows the size of the food price burden on urban households. From Cuttack to Panaji, Jammu to Chennai, families have paid more every year for the last three years for staple foods
Households in urban India are besieged by steadily rising prices of essential foods. Their struggle becomes visible in the stark numbers of official retail price data for these foods, as compiled by the central government. Wheat, onions, potatoes and edible oils have been particularly affected by the inexorable price rise. In the case of several foods, their prices in December 2007 are more than twice what they were 36 months earlier, far outstripping official inflation rates and easily outpacing the celebrated growth of the country’s GDP.
The retail and wholesale prices of 16 essential food commodities are maintained by the Price Monitoring Cell of the Department of Consumer Affairs, a key department of the Ministry of Consumer Affairs, Food and Public Distribution. The monitoring cell tracks prices for 37 cities in India. An analysis of the data for the last 36 months, from January 2005 to December 2007, is a valuable aid to documenting a hidden but vitally important aspect of India’s growth story.
Rising costs of staple foods has now become commonplace in Asian countries. There is a rice shortage in Bangladesh and China too, while there is a wheat shortage in Afghanistan. In local markets in Pakistan, the price of rice in February was more than 60% above the price last February. India recently contributed to soaring world prices when it imposed a ban on rice exports -- relaxed only partially to allow some supplies to Madagascar, Mauritius, the Comoros Islands and cyclone-hit Bangladesh. China has banned rice exports to ensure enough is available for domestic demand.
Economic growth in Asia is cited by the International Food Policy Research Institute as a key reason for the broad spectrum price hikes. “High growth in per capita income, especially in Asia, is driving demand for food,” said Joachim von Braun, the Washington-based group’s director general. At the same time, Asia’s growth has left many of its poor behind: they spend between 50% and 70% of their meagre incomes on food, making price rises especially debilitating.
Every single urban centre covered by the monitoring cell has experienced steep price rise pressures in several food commodities, and some of the most conspicuous are:
- In Agartala the price of onions rose over 57% over 36 months until December 2007, and over 69% for the 24 months until December 2006. The price of gram dal rose 54% over the 36-month period.
- In Ahmedabad the price of gram dal rose over 62% over 36 months till December 2007, that of potatoes 71% and onions 100%. The price of wheat rose 31% over the period due to a 36% rise over calendar 2006.
- In Amritsar the price of groundnut oil rose over 68% over the 36-month period: it went up 43% in calendar 2007 alone. The price of potatoes is 100% higher over the 36-month period, and that of onions is 71% higher.
- In Bangalore the price of gram dal rose for calendar 2005 and 2006 by 30% and 38%. Tur dal cost 42% more in December 2007 than it did in January 2005. Onions and potatoes cost 33% and 78% more respectively.
- In Bhubaneshwar the cost of rice rose 26% through calendar 2007, and tur dal 43%. Over the 36-month period the cost of wheat rose 72%, with onions and potatoes both costing 100% more.
- In Chandigarh gram dal cost 72% more over the 36-month period while atta cost 55% more and rice 36% more. In December 2007, the price of mustard oil was 51% more than it was in January 2006.
- In Chennai the price of rice rose 25% through calendar 2007. Groundnut oil cost 28% more over the 36-month period, potatoes and onions 87% and 71% more respectively, and loose salt 60% more.
- In Ernakulam the price of tur dal rose 31% through calendar 2007. The price of vanaspati has risen 28% over a 36-month period, loose tea is up by 117%, onions by 76%.
- In Guwahati the price of gram dal rose 38% through calendar 2006 and that of tur dal was 27% more over the 36-month period, while onions cost 78% more.
- In Hyderabad the price of rice rose 18% through calendar 2007, that of tur dal 52% and vanaspati 31% in that period.
- In Jaipur the price of gram dal was 67% higher in December 2007 than in January 2005. The cost of tur dal rose 40% through calendar 2007 and of potatoes 66%.
- In Kolkata rice cost 30% more in December 2007 than in January 2005 with an 18% rise in calendar 2007 alone. Potatoes and onions rose 125% and 87% respectively over 36 months.
- In Lucknow the price of gram dal rose 90% over the 36-month period and tur dal 53%. The price of potatoes rose 150% through calendar 2007.
- In Nagpur the price of tur dal rose 69% over 36 months, that of potatoes 189% and onions 136%.
- In Panaji the prices of gram dal and tur dal rose over the 36-month period by 58% and 61% respectively while groundnut oil rose 36%.
- In Rajkot the prices of gram dal and tur dal rose 52% and 40% respectively over the January 2005-December 2007 period, while groundnut oil rose 35%.
These are individual urban examples with select foods. Some cities however have been more exposed to higher price rises for more food items than others. Ernakulam, Shillong, Thiruvananthapuram, Jammu and Panaji are at the top of the list of cities that feature most often as having experienced high prices for more than one of the 16 food items.
Consider the retail price per kg of gram dal, a food whose price has risen in almost all the urban centres measured. In the 36-month period it was most costly in Thiruvananthapuram (Rs 49 in December 2006), Ernakulam (Rs 49 in January 2007), Panaji (Rs 48 in November 2006), Shimla (Rs 48 in October 2006) and Mumbai (Rs 46.50 in October 2006). In contrast, gram dal was cheapest in Bhopal (Rs 17.50 in April 2005), Hisar (Rs 18 in May 2005), Jaipur (Rs 18 in April 2005), Jodhpur (Rs 18 in January 2005) and Kanpur (Rs 18.50 in January 2005).
Jaipur, Kanpur, Patna, Bhopal and Vijaywada emerge as the cities which experienced relatively smaller increases in price for the set of essential foods. However, their residents have all also borne high prices for some foods: Vijaywada has paid Rs 18.50 per kg of rice (May 2006) which was double the cost of rice in Patna, and Kanpur has paid Rs 45.50 per kg for tur dal (December 2007) which is twice what Nagpur has paid.
At the micro-economic level, whether a household will benefit or lose from high food prices depends on whether the household is a net seller or buyer of food. Since food accounts for a large share of the poor’s total expenditure, a price increase in a staple food will mean reduced quantity and lower quality of food consumption.
The data also emphasises the wide price differentials between centres (across the measured period) for the same food. Where wheat is concerned, the Rs 19 per kg that a resident of Thiruvananthapuram paid in December 2006 is more than three times the Rs 6 per kg that a resident of Patna paid in February 2005.
Notes
- The 16 essential food commodities are: rice, wheat, atta, gram dal, tur dal, sugar, gur, groundnut oil, mustard oil, vanaspati, tea (loose), milk, potato, onion, salt (pack), salt (loose)
- The complete analysis uses data from the Price Monitoring Cell for retail prices (per kg) for 36 months from January 2005 to December 2007
- The 37 urban centres monitored are: Agartala, Ahmedabad, Aizawl, Amritsar, Bangalore, Bhopal, Bhubaneshwar, Chandigarh, Chennai, Cuttack, Delhi, Ernakulam, Guwahati, Hisar, Hyderabad, Indore, Jaipur, Jammu, Jodhpur, Kanpur, Karnal, Kolkata, Lucknow, Ludhiana, Madurai, Mandi, Mumbai, Nagpur, Panaji, Patna, Pondicherry, Rajkot, Shillong, Shimla, Srinagar, Thiruvananthapuram and Vijaywada (there was very little data for Jammu and Srinagar, over the period used, for the complete analysis)
(Rahul Goswami is an independent journalist and researcher based in Goa)
InfoChange News & Features, March 2008 |
