Essentials go beyond reach

Prices of commonly used commodities have shot up exponentially since last October.

With the prices of various essential commodities having witnessed an increase ranging between 12 per cent and 84 per cent since last October, this Diwali may not be very bright for the aam aadmi.

The price of besan, the basic ingredient for making sweets, particularly 'laddu', has gone up by about 60 per cent as compared with that of last October, making 'laddu' less sweet.

The wholesale price of Rajdhani brand of besan is Rs 48 a kg this time as against Rs 31 last October.

Even the price of maida and sooji has gone up by 12 and 25 per cent, respectively, over the last one year.

The wholesale price of Rajdhani brand maida has increased from Rs 16 a kg to Rs 18, while the same for sooji has gone up from Rs 16 a kg to Rs 20.

The price of ghee has also gone up by about 37 per cent as compared with that of last year. Nova brand ghee is selling at Rs 165 a kg as compared with Rs 120 last October. The price of ghee has gone up mainly on account of shortage in supply of milk and consequent rise in milk prices. Ghee is used in preparation of sweets.

"We had to raise the price as our raw material (milk) is costing more. We are buying milk at Rs 18.50 a litre as compared with Rs 14 last year. Companies are facing shortage of milk this year," said Kuldeep Saluja, managing director of Sterling Agro Industries, that manufactures Nova brand of ghee.

High prices have also significantly affected the sales of companies that are into these products. Mills are also operating below capacity.

"There is a fall in demand. Diwali season is usually one of the highest-selling periods, but this time, the halwais have started using alternative cheaper items in their various preparations," said Chetan Jain, director of Rajdhani Flour Mills.

The futures prices of urad, wheat and chana have gone up between 23 per cent and 84 per cent year on year.

At the National Commodities and Derivatives Exchange (Ncdex), the prices of 2006 October futures of urad, chana and wheat have moved up by about 84 per cent, 68 per cent and 23 per cent, respectively, compared with those of 2005 October futures during the corresponding period.

Urad futures prices have moved from Rs 2,189 to Rs 4,035 a quintal, while chana futures prices have increased from Rs 1,878 to Rs 3,158. Wheat futures prices have also increased from Rs 802 to Rs 904 a quintal in the same period.

The rise in prices of these essential commodities could be attributed to various causes ranging from the demand-supply mismatch to inconsistencies in government policy.