Power crisis and fertilizer costs will increase food prices

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Power crisis and fertilizer costs will increase food prices
13 May 2022
6 min read

News Synopsis

Apart from a massive hike in cooking oil prices, increasing wheat prices has propelled the food price inflation to a 17-month high of 8.1% in the month of April. The cereal price increased by 6% and cooking oil by 17%. The rate of inflation is estimated to increase further in the month of May.  Additionally, research by Barclays, states, “High-frequency prices for the month of May suggest that the price pressures are here to stay for some time to come. Indeed, available data from the Department of Consumer Affairs suggest that with the exception of pulses, mustard oil, and some vegetables, such as onions, the prices of all food products are rising in May.”

Other than the increase in rural inflation, farmers in the monsoon season will face a significant hike in electricity prices. The electricity price is already sky-high amid the ongoing energy crisis in the country

The prices of fertilizers have also been increasing significantly, lately. A report by CARE Edge says, “Rising fertilizer prices internationally are expected to push production costs higher for farmers and it will feed into food prices. In the past 12 months, the World Bank’s fertilizer price index has surged by more than 150%. Subsidy support extended by the government could provide some relief but whether it will be enough to tame the cost of production remains to be seen.”

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