Delayed monsoon pushes food inflation near 10 percent

Food inflation nears 10 percent with prices of vegetables like tomatoes sky rocketing in the domestic markets due to weak rainfall since the start of monsoon season, which has raised concerns of a first drought in the country in five years.

The retail price of tomatoes in local markets has risen to Rs. 50 per Kg in Gujarat.

Unseasonal weather, hoarding and price manipulation have in the past led to dramatic price rises, and the new administration of Prime Minister Narendra Modi is anxious to avoid the political fallout that has hit other governments over the cost of the food.

A doubling in retail prices across major cities is especially troubling for staples such as onions, an ingredient that is present in just about every Indian meal.

A vegetable vendor in Rajkot, Chagan Sharma said that scanty rainfall has led to soaring prices of vegetables across the country.

"The high rates of tomatoes are because of scanty rainfall. If it rains anytime soon, then the price of tomatoes will decrease." said Sharma.

Supply shocks like these complicate the government's task of battling weak growth and inflation. It also underlines the irony of high food costs in India, which after China is the world's biggest fruit and vegetable producer.

Importing onions would be the only effective way to curb soaring prices, agriculture experts say, but similar steps in the past have failed to ease supplies.

People said buying vegetables in wholesale markets and soaring prices of commodities like vegetables and fruits are making holes in the pocket of the common man.

"Today, tomato prices are sky-high, one kilogram of tomatoes is Rs 50. So we are unable to decide how to manage our budget now," said a customer buying vegetables in the market, Archana Pabbaji.

India's food price inflation is nearing double-digits, with a late monsoon pushing up the cost of vegetables and dairy products. The government has also raised railway fares and fuel prices as crude oil prices have risen in international markets.

The wholesale price inflation hit a five-month high of 6.01 percent in May, underscoring the challenges faced by the new government, whose Modi has warned he will administer "bitter medicine" to revive the ailing economy.