Indian Food price inflation – not just a one-off
There is more to India’s food price inflation – which touched a decade-high 20% YoY in December 2009 – than just the drought. A fundamental tightness in the domestic demand-supply balance of food seems to have emerged over recent years. The spurt in wholesale prices of some food items in 2009 – sugar 35%, pulses 41%, milk 13% and eggs 24% – was the highest in over a decade and that could complicate monetary policy. Global food price trends alone do not explain the acceleration in food price inflation in India. Read more