Supply constraints pushing up food inflation: KPMG
November 8th, 2011 - 9:35 pm ICT by IANS
New Delhi, Nov 8 (IANS) 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.
- High food inflation due to change in food habits? - Nov 08, 2011
- Interest rates could go up after monetary policy review Tuesday - Jan 24, 2011
- RBI hints at more monetary action to curb inflation - Nov 22, 2011
- Karnataka holding agri-biz summit to woo investments - Nov 25, 2011
- India's central bank may raise rates Tuesday - Jan 23, 2011
- PM hints at further fuel hike if international prices rise - Nov 12, 2011
- India's inflation overshoots official target (Lead) - Apr 15, 2011
- High price of essentials hits average Indian in metros - Aug 28, 2011
- Wholesale, retail price gap pushing inflation up: Pranab - Jan 06, 2011
- Central bank's rate hikes may not tame inflation: Economists - Jan 27, 2011
- Reducing food inflation will take some time: Pranab - Sep 03, 2011
- India's annual inflation rises to 8.43 percent - Jan 14, 2011
- Rising inflation due to festive season demand: Mukherjee - Nov 03, 2011
- Inflation to fall below 8 percent by fiscal end: Ahluwalia - Oct 20, 2011
- Govt. taking all steps to check price rise: Mukherjee - Jan 09, 2011
Tags: agri business, agriculture sector, business models, consumer markets, demand factors, demographic patterns, disposable income, economic advances, food items, foreign direct investment, fresh produce, growth factors, inefficiencies, investment inflows, kpmg, lifestyle changes, milk and sugar, opportunity india, side constraints, supply constraints