Why fuel prices shouldn't affect food prices

The recent fuel price hike should have an impact on food prices, considering the increase in transportation costs. But in India the impact would not be substantial as the short road distances travelled by India’s food would now be a blessing. Since carbs, fats, sugar, milk and greens clock barely a few hundred food miles, diesel price hike may leave MRPs untouched for now.

ET states that Household food budgets will begin to feel the real pinch only around Diwali after farmers use more expensive diesel to water fields in the coming kharif and raise farm-gate prices. Meanwhile, if the consumer is asked to pay significantly more for basic food items, it may be more due to profiteering and the market’s inflation expectations rather than any major rise in actual cost.

Comments

Tiger said…
I have not thought in this direction! Good observation Sir. Bu I think people dont wait to charge more. They always look for a chance to charge more. So I think the effect would be much earlier than Diwali season.
Tiger said…
Sir,

The price rise has started.

The price rise has moved beyond commodities and fine decimal points — it’s now affecting goods on shop shelves. Items of daily use like soaps, shampoos, biscuits, detergents and other fast moving consumer goods have gone up by 10-30% in the last three months.

TOI's news today.

Popular Posts