By IANS,
New Delhi: Terming the widening gap between wholesale and retail prices the major reason for soaring food inflation, Finance Minister Pranab Mukherjee Thursday asked state governments to urgently look into supply chain management and address the bottlenecks.
“State governments need to ensure that all bottlenecks in the supply chain are removed so that food prices can be brought down quickly,” Mukherjee said, reacting on the sharp jump in food inflation, that has more than doubled in a month.
The minister asked state governments to urgently look into the supply management of items that are pushing prices of essential food items northward.
Annual food inflation soared to the highest level in a year at 18.32 percent for the week ended Dec 25 on sharp increase in the prices of a few primary items like onion, fruits and vegetables, milk, poultry, meat and fish, official data showed Thursday.
This was the fifth straight week of sharp rise in food inflation, which stood at 14.44 percent the week before. Annual food inflation was 8.6 percent for the week ended Nov 20, 2010.
“Three-fourths of food inflation is explained by inflation in vegetables, and nearly one-fourth is explained by inflation in milk,” Mukherjee said in a statement.
“While there are some weather-induced supply constraints on some of these items, which go against the seasonal decline normally seen at this time of the year, a large part of price rise is due to widening gap between the wholesale and retail prices and the growing demand for these products due to rising income levels,” he said.
Earlier talking to reporters, Mukherjee said the latest data on food inflation was certainly a cause for concern but said since these were short-term statistics, the real picture would emerge when the monthly figures on wholesale prices are released.
“It has moved further. It is an area of concern. Let’s wait for monthly figures. These are weekly variations, but is a matter of concern,” he said.