By IANS,
New Delhi : India’s food inflation has remained high in the recent month and surged to over 12 percent for the week ended Oct 22, mainly because of the supply constraints, KPMG said in a report Tuesday.
“While demand factors like rising incomes affect income elastic food items like milk and sugar, the supply side constraints have been a key contributor to the rising prices,” KPMG said in a report titled “Taming Food Inflation Through Innovations In Agribusiness”.
The report points out that the high level of inflation essentially arose from supply constraints on account of the inefficiencies in production, processing, distribution and retail of fresh produce and food products.
“These constraints have been further exacerbated by an increase in demand led by growing per capita consumption of food driven by the economic advances of the past decade.”
Food inflation rose to 12.21 percent for the week ended Oct 22, the highest in nine months, according to the latest official data.
According to the report, innovation in the agriculture sector via new business models can assist in meeting the supply constraints currently plaguing the industry.
The Indian agri-business is a $450 billion opportunity. India is one of the largest consumer markets in the world, driven by growth factors like favourable demographic patterns, increasing disposable income, urbanisation, lifestyle changes and increased foreign direct investment inflows.