High Food Prices Pose Challenge to India's Inflation Target

   |  Updated: May 20, 2016 14:27 IST

High Food Prices Pose Challenge to India's Inflation Target
Prices of many foodstuffs such as pulses, sugar, vegetables and poultry products are set to surge in India in the next three months on thin supplies, which could fuel inflation and give the central bank little room to cut rates, said analysts.

April consumer price inflation broke a recent slowing trend after food inflation came in at 6.32 percent, compared with 5.21 percent in March. Food prices are a political hot potato in India, where more than a quarter of its population of 1.2 billion people live on a mere 74 cents or less per day.

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India is struggling with the first back-to-back drought in nearly three decades, which has ravaged crops, but expected good rains in the June-September monsoon season may boost production and food supplies later in the year.


Indian farmers usually start sowing summer crops from June onwards and harvesting starts in October.

© Thomson Reuters 2016

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