Lower volatility in pulses inflation — around the lower average levels — seen in the past few years benefits both producers and consumers. Producers get stable price signals and better visibility on earnings and consumers benefit from gradually reducing inflation over time
This year, though, pulses inflation is a concern due to spillover from some crop damage last year as well as ongoing monsoon disturbance, which would require government intervention
Yet, peak inflation in pulses this year is likely to be less pronounced than seen in the episodes of inflation spikes over the last two decades
In the past five months, the inflation rate of pulses has nearly doubled. When measured at the Wholesale Price Index (WPI) level, it stood at 5.8% in May, while at the Consumer Price Index (CPI) level, it was 6.6%.
Considered a staple food item, pulses are an important source of protein for a vast majority of the Indian population. In the food inflation basket, it has a 6% weight and hence any sharp increase in prices can hurt household budgets. Containing pulses inflation therefore becomes a policy priority.
This recent pick-up in pulses inflation should not come as a surprise. The periodic ups and downs in pulses inflation is not new.
But rising inflation in pulses, when other staples such as rice and wheat are already seeing inflation rates of ~10% and ~12%, respectively, create ground for some probing into the trends that influence this food sub-category.
