Hindi English Translation || Editorial || Food flux: On food costs and the October tidings

Food flux: On food costs and the October tidings

Amid the cooler headline inflation, food price pressures pose a risk

In October, India’s consumer price inflation (मुद्रास्फीति) eased to a four-month low of 4.87%, while wholesale prices declined year-on-year for the seventh successive month by a minor 0.5%. Although only marginally (सीमांत) lower than the 5% retail inflation in September, October’s price rise pace — which is exactly the same as that in June — surely represents some relief for the third successive month from July’s 15-month high pace of over 7.4%. Rural consumers still face a higher inflation of 5.1%, though. Core inflation, which excludes energy and food costs, has eased further and household services inflation dropped below 4% after several months above. The rise in prices of vegetables, which had surged (आवेश, लहर) over 37% in July, eased to 2.7% in October. However, the overall uptick in food costs for households stayed firm at 6.6%, virtually unchanged from September, as other essential edibles (खाद्य) saw faster price hikes or remained at elevated levels. Some of these — like pulses (up 18.8%) and cereals (10.7%) — may be attributed to worries about the kharif output and uncertain rabi prospects (संभावना) as well as hikes in minimum support prices for crops. Pulses prices were up 19.4% at the wholesale level, signalling that more pass-through to retail prices is likely.

The Monetary Policy Committee of the Reserve Bank of India, which meets early December for its next review, will not be too swayed by the October tidings (समाचार). As per its 5.6% average inflation projection (पूर्वानुमान) for this quarter, down from 6.4% in the previous quarter, November and December may well see an average inflation of 5.95%, fractionally short of the central bank’s upper tolerance threshold. Excluding edible oils, whose 13.7% year-on-year drop in prices played a key role in moderating (नियंत्रित, सीमित) the Consumer Price Index, would have meant a 5.6% rise in prices. Base effects from last year, when the Ukraine conflict had spiked (A sudden and sharp increase, especially in a graph or chart) edible oil prices, will start to dissipate in coming months. Similarly, while the 6.8% inflation recorded in October 2022 helped cool price rise last month, those base effects will surely ebb this month. Retail (The sale of goods to the public for use or consumption) inflation had eased to 5.88% last November, with the food price index rising just 4.7%, from 7% in the previous month. The perceived retreat of inflation last month thus may only be fleeting. Households that seem to have adjusted to the continuous recent rise in living costs, by pulling back on discretionary (विवेकाधीन) spends and downsizing essential consumption as per industrial output trends, are likely to remain cautious rather than loosen their purse strings anytime soon. For an economy whose resilience relies on its domestic demand buffer against global shocks, reluctant or budget-cramped consumers are the biggest headwind for policymakers to strive to address.

Courtesy: The Hindu

Important Word List With Meaning

1.Flux (Noun)

Hindi Meaning - प्रवाह
English Meaning - Continuous change or flow; a state of constant movement or fluctuation.

2.Tiding (Noun)

Hindi Meaning - समाचार
English Meaning - News, information, or updates, especially of recent events.

3.Marginal (Adjective)

Hindi Meaning - सीमांत
English Meaning - Relating to or situated at the edge; minimal or insignificant.

4.Surge (Noun)

Hindi Meaning - आवेश, लहर
English Meaning - A sudden powerful forward or upward movement; a strong increase.

5.Edible (Adjective)

Hindi Meaning - खाद्य
English Meaning - Fit to be eaten; suitable for consumption.

6.Prospect (Verb)

Hindi Meaning - संभावना
English Meaning - The possibility or likelihood of future success or something happening.

7.Projection (Noun)

Hindi Meaning - पूर्वानुमान
English Meaning - An estimate or forecast of a future situation or trend based on a study of present ones.

8.Inflation (Noun)

Hindi Meaning - मुद्रास्फीति
English Meaning - The rate at which the general level of prices for goods and services is rising.

9.Moderate (Adjective)

Hindi Meaning - नियंत्रित, सीमित
English Meaning - Kept within reasonable or modest limits; not extreme.

10.Discretionary (Adjective)

Hindi Meaning - विवेकाधीन
English Meaning - Available for use at the discretion or judgment of the user.

11.Retail (Noun)

English Meaning - The sale of goods to the public for use or consumption.

12.Spike (Verb)

English Meaning - A sudden and sharp increase, especially in a graph or chart.