Food inflation likely to soften in the coming months: Assocham

Posted By: Religare
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Food inflation likely to soften in the coming months
Food prices are likely to soften in the coming months on account of good monsoons and the influx of Kharif crop, said Assocham.

"We believe that food inflation pressures are likely to soften in the coming months on accord of good monsoons and arrival of the Kharif crop," Assocham President Rana Kapoor said.

Besides, with the August wholesale price inflation being driven by a jump in food prices, Kapoor said the government must take measures to augment investment in the agriculture sector to improve supply chains, warehousing and other related infrastructure, reported PTI.

The investment in supply chains must be coupled with a renewed thrust on horticulture products, improvement in irrigational facilities to reduce dependence on monsoon and insurance schemes for agri sector, Assocham said.

"This (investment in agriculture) will ensure adequate supplies of essential items at reasonable prices to consumers, since food inflation acts as an inequitable tax on the poor and the Government has to strive to abate prices pressures in the category," Kapoor said.

With the Rupee gradually gaining back lost ground, pressure from currency depreciation on headline inflation will ease going forward. However, risks to fuel inflation remain on the upside, as a sharp adjustment in diesel prices is expected this month, he added.

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