The widespread cereal shortages in India could drive inflation higher in India, even as the vegetable price shock is set to ease in the coming months, HSBC Holdings Pranjul Bhandari and Aayushi Chaudhary wrote in a report. The worry on cereals, including rice and wheat, are “legitimate” and may push prices higher.
Only 1 Rice Bag Per Family: Write US Stores After India Bans Export New Delhi, July 25 (IANS) After the Indian government prohibited the export of non-basmati rice, many departmental stores in the US are limiting the number of rice bags customers can purchase.
India may extend its export ban to other categories of rice due to high inflation and uneven rainfall, which could further disrupt global rice prices and impact domestic inflation. The government had already banned non-basmati white rice exports, imposing a 20% export tax on it followed by the restriction of broken rice.
The government, which banned non-basmati rice exports earlier this week, is likely to usher in more supply-side measures to tame the price rise going forward, Nomura said in a note. "We expect continued supply-side interventions, with inflation likely to be above 6 per cent levels in July and August, buoyed by sky-high vegetable prices," Nomura economists said.