... As Rising Food Inflation Bites Deficient rains, weak rupee & exports drive up prices of essential items

Food inflation is expected to climb this month on the back of a patchy monsoon, weak rupee and exports as prices of edible oil, pulses, sugar, vegetables, spices and grains continue to spiral, notching up significant gains in the last six weeks. Analysts say international prices of soyabean and sugar will also influence domestic prices in the coming weeks. Prices of major essential commodities have gone up 10-15% in the last six weeks and are expected to remain firm this month. Sugar prices jumped . 2-2.5 per kg in the first week of July after the levy quota for July, August and September was announced. The wholesale price of S-30 sugar in the Vashi market near Mumbai increased from . 2,850/quintal a week ago to . 3,080/quintal on Friday. "We expect prices to remain stable at this level in July and thenincrease again from September. Expectations of lower sugar production in the next season are also likely to keep the market firm," said Ashok Jain, president of the Bombay Sugar Merchants' Association. The NCDEX agri commodities index on Saturday closed 1.11% higher at 2,590.91, with maximum gains coming from products such as mustard seed, pepper, chana, coriander, cotton, jeera and refined soya oil. Acreage in Some Crops Still Down  Vandana Narvekar, senior research analyst (agri commodities) at Angel Comtrade, said: "Monsoon in July is critical for prices to remain at the normal level as 70% of the kharif crop is sowed this month. If this does not happen, prices of agri commodities may go up. International prices will also have an impact on edible oil and sugar prices."  Though the monsoon has advanced in some parts of India, acreage in certain crops is still down. Sowing of soyabean is down 25% and paddy acreage has fallen 26.3% till the end of last week. However,the acreage in pulses has gone up to 13.04 lakh hectares from 12.38 lakh hectares last year. The rise is significant because the area under cultivation was only 3.99 lakh ha by June end as against 6.08 lakh ha in the same period last year.  Prices of spices have surged 15-20%, with turmeric taking the lead. Vegetable prices are expected to remain high at least till August as sowing has been delayed due to lack of adequate rainfall, said All India Vegetable Growers' Association President Shriram Gadhve.  Wholesale prices of onion, one of the most common vegetables in India, has increased marginally by . 1-2 per kg due to delay in sowing. Potato prices have risen 15-20% in the last six weeks. Tomato acreage has come down about 20% in the Narayangaon-Sangamner belt in western Maharashtra and wholesale prices are at about . 12-15 per kg. In Delhi's Azadpur mandi, the wholesale price on July 5 was . 10/kg while retail prices are in the range of . 40-50 per kg.  Anis Chakravarty, director and senior economist at financial advisory firm Haskins, Deloitte & Sells, said the monsoon will play a crucial role in July inflation numbers. "(June) food inflation may go up, affecting headline inflation," he said.