New Delhi: With food inflation surging close to 18%, India may have to “urgently” import 3-5 million tonne sugar, the Prime Ministers economic panel said in its review of Indian economy for the current financial year. The country may also have to import rice if the procurement falls below the level of 27 million tonne, the panel indicated.
“This makes it imperative to conserve as much of rice as possible till kharif 2010. It is essential to withstand any future shock to output,” the panel said in its report.
On management of food stocks, the panel said the government should timely release foodgrains from public stocks in sufficient quantities at lower-than-the-market prices to address the price rise issue. Food prices have remained an issue of concern for the government. The finance minister Pranab Mukherjee recently described the inflation level as ‘disturbing’. The WPI index for primary food articles crossed 20% in November 2009 and even was close to 18% in January-end.
However, the economic think tank maintained that the inflation level would be around 8.5% by March 2010, the same as Reserve Bank’s expectations. On import of sugar, the PM’s panel report said, “ It is imperative that urgent steps are taken to import white sugar to the extent of shortfall in availability which may be assessed at somewhere in the region of 3 to 5 million tonne.”
The current sugar year (October-September) began with a record-low stock of less than 2 million tonne, the report said, adding the output was likely to dip further to 14 million tonne from 14.7 million tonne in the previous season. Within the primary food articles basket, the goods that have exhibited the highest rate of inflation are foodgrains—pulses, wheat and rice .
The panel said, “Another factor that considerably blunted the impact of foodgrain releases by the government was the overload on the PDS. There is a clear imperative to develop a distribution channel by states, to supplement the PDS, so as to enable faster distribution of the additional releases made by the central government.”
Source : Financial Express