Demand for better food behind demand-supply mismatch: Assocham

Sun, May 18 07:31 PM

Mumbai, May 18 (PTI) Indian industry body Assocham today echoed the US assessment of spiralling global food prices - that it is being caused partly by demand for better food in the subcontinent nation. "Of late with rate of employment on the rise and income levels rising, a certain section of poor people, who were earlier consuming jowar (sorghum) have started consuming wheat which has resulted in more demand for wheat," Assocham President Venugopal Dhoot said here.

A similar statement by US President George Bush in early May that rising prosperity in India was "good" but it triggers demand for "better nutrition" that in turn leads to higher food prices had set off a controversy, prompting stinging reactions from Indian politicians. Assocham, which today released a study on inflation, also said that the most critical demand side factor was population growth.

"While the population has grown 1.9 per cent annually, food grains production has failed to match it. The per capita availability of cereals and pulses have declined between 1990 and 2007," the industry body added.

Dhoot said: "Internationally, the real prices have reached the highest since the mid 1970s," while asking the government to let the Rupee appreciate, which will discourage exports and increase domestic availability of essential edibles. The Rupee has, however, fallen over six per cent against the US dollar this fiscal, as demand for the greenback has grown in view of the upward spiral in oil prices.

PTI.

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