Don't like bread? Have cake this Diwali

NEW DELHI: Partying will bring extra joy this festival season as food prices break away from tradition and hit new lows. For the first time in several years, all essential groceries ��� atta, rice, cooking oil, sugar ��� are going through an exceptionally slow summer that has refused to perk up despite the crowd of pujas marching in.
The same monthly food budget will now do very nicely, thank you, because a quirky cocktail of open markets and government policy has kept the brake on prices despite demand.Cooking oil prices are down Rs 2/l in the last two months and expected to slip further when the soya harvest comes in.
"We will review MRP once again before Diwali to see if another Re 1-cut is warranted," said officials at Adani Wilmar, manufacturer of Fortune, the largest selling vegetable oil brand in India. Interestingly, each of these essential commodities has a different story to tell.
Wheat and atta prices are low, despite a smaller harvest, because farmers have been periodically selling off their marketing surplus. Last month, farmers sold 7 million tonnes from high open market prices. That brought wheat prices crashing, with traders scrambling to recover carrying costs.
As the government has also been pumping in grain supplies through the public distribution system network, there has been little incentive for demand to spiral out of control.
In cooking oils, low prices are a combination of falling world prices due to large harvest in the US and a cap on domestic prices by the large mustard seed stocks being sold by the National Agricultural Cooperative Marketing Federation of India (Nafed).
Nafed had procured large quantities of mustard in March-April at a high price. That reduced open market seed availability for mills and led to excessive import of crude oil in June-August.
This oil is now in the market together with subsidised Nafed oilseeds. The government has also reduced tariff values for imported oils to align it with international prices.