Metros stung most by food inflation

Life in the four metros across the country is getting tougher for poor and middle class consumers as their budget for grocery and other food items has shot up by almost 40 per cent in the last one year, with Delhi being worst hit.

The maximum surge in food prices was witnessed in the national capital, followed by Kolkata, Mumbai and Chennai, according to the analysis of the retail price data of 14 essential items maintained by the Ministry of Consumer Affairs.

"Ideally, there should not be much difference in prices of food items across metros," farm scientist M S Swaminathan said.

Increasing purchasing power of consumers and mismatch in supply-demand were pushing prices through the roof in all four cities, he said, adding that the volatility in global food prices was spilling over on domestic rates.

Retail prices of onion, gram, rice, sugar, groundnut oil and vanaspati ruled highest in Delhi among all metros as on April 1, the data said.

FICCI Secretary-General Amit Mitra said: "Delhi is worst hit by the price rise among metros because it does not have a connected hinter land for food supply.

With the rise in international crude oil prices, logistic and transportation costs are fueling the food prices further."

Besides, the changing food habits on account of rising income had also catapulted the spike in prices, he said.

In the capital, prices of edible oils and pulses have shot up by 20-35 per cent in the last one year. Groundnut oil rose to Rs 121 a kg on April 1 in Delhi compared with Rs 92 a kg in Kolkata, Rs 91 a kg in Mumbai and Rs 78 a kg in Hyderabad.

Prices of politically sensitive items like onion remained highest in the Delhi Rs 10 a kg at the beginning of the month.

Meanwhile, in the financial capital Mumbai, wheat, atta and sugar prices surged the most. Wheat rates went up by 24 per cent to Rs 15.5 a kg compared with other metros.

In south India, where rice is the staple food, prices have a shot up by over 40 per cent despite Andhra Pradesh and Tamil Nadu being the largest producers of grain in the country.

Rice in Chennai has become costlier by Rs 4 a kg. Abheek Barua, chief economist, HDFC Bank said: "Food items are priced at higher levels in metro cities because of better buying power of people".

Whether smaller cities or big metros, there would always be a local variation in prices, he said. Of the 14 food items analysed, mustard oil and milk prices rose highest in Kolkata compared with other cities.

Mustard oil went up by 39 per cent to Rs 78 a kg while milk rose by Rs 4 to Rs 30 a kg in the last one year.

Tea (loose) prices rose by 10 per cent to Rs 230 a kg in Chennai. In other metros, prices remained in the range of Rs 100-150 a kg.