Effect on Prices And The Global Hit! A Hit on Customer's Wallet

Effect on Prices And The Global Hit! A Hit on Customer’s Wallet

The steep surge in country’s covid-19 cases has taken a toll on the agricultural market and food prices. Prices of essential commodities such as edible oil and pulse shot across India. The change in prices is not limited to India, international food prices have also increased by 47.2 % reaching their highest levels on May 2021 since 2014 according to some IMF experts.

Many segments like transportation, health and personal care have also witnessed sharp increase in prices, which economists attributed to the pandemic. Here, we are pointing out some of factors behind the inflation in several sectors across India.

One, Internal movement barriers and covid protocols led to difficulty in movement of food from rural to urban areas. A mismatch in the demand and supply and labour shortage affecting the loading, unloading, and sorting of commodities, caused by the restrictions are some major contributors of food inflation. Pandemic-related production roadblocks also contributes to rising food and oil prices.  

Two, land transportation cost has increased sharply, as truckers struggle to cross interstate borders, despite exemption from the lockdown.  And three, the disruption in supply chain leading to cost-push inflation alongside Indian Government’s policy of increasing tax on fuels are some factors contributing to country level inflation.

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