Food inflation still a concern
Uncertainty due to shortfall of monsoon, says Nestle India CMD Suresh Narayanan
New Delhi Food inflation is still a cause of concern despite measures taken by the government to check overall price rise and the movement of commodity prices needs to be closely watched for a long-term impact, Nestle India Chairman & Managing Director Suresh Narayanan said on Thursday.
Going by publicly available information, now it is reasonably clear that with a 30 per cent deficit in the monsoon, Kharif crops might get impacted, even if the sowing is good, said Narayanan in a media roundtable here. With this El Nino impact not fully played out, we still have to watch for the spectre of food inflation, he said.
“There will be pressure in terms of food inflation. Headline inflation will get mitigated because of various steps that the government will take but food inflation is still a cause for concern,” Narayanan said. However, he also added, “Immediately put, I would not say that something alarmist is happening in terms of commodity prices. But we would have to watch this space and see how it evolves, impact being really for 2024 rather than immediate impact we will have.” On increased milk prices, Narayanan said it has a few structural issues as well. “We talked about the post-Covid impact on the milch herd and then we had the lumpy skin disease and various other things, but that still has to be played out and plus the cost of production has gone up sharply. There has been a 30-40 per cent increase in the cost of feed,” said Narayanan adding “We do not expect the former to be able to absorb all of them”.