Food Price Inflation Worries in India

Mayank Mehta
04 Mar, 2010
New York City

Food prices and wholesale prices remained at elevated levels according to the latest data from the government. Truck transportation association said members plan to increase freight rate by 15% after fuel taxes were lifted. Shipping companies closed higher after container freight rates surge 40%.

[R]6:00 PM Mumbai, 8:30 AM New York – Food prices and wholesale prices remained at elevated levels according to the latest data from the government. Truck transportation association said members plan to increase freight rate by 15% after fuel taxes were lifted. Shipping companies closed higher after container freight rates surge 40%.[/R]

Food price inflation concerns investors after wholesale food price index remained at an elevated level. Truck transporters, who ship 65% of goods in India, raised freight rates to pass increase in fuel prices.

The Sensex index in India decreased 28.31 or 0.17% to 16,971.70 and CNX Nifty index fell 7.85 or 0.15% to 5,080.25. Among the Sensex 30 stocks, 16 rose and 14 fell.

On BSE trading, 1,721 stocks advanced, 1,173 declined and 77 were unchanged. Telecom shares gained on fresh buying.
All India Motor Transport Congress said trucking companies plan to increase freight rates by as much as 15% to pass higher fuel and excise tax rates on fuel.

Food price index rose 17.87% in the 12 months to February 20, faster than the annual rise of 17.5% in the previous week, government data released today, March 4 showed.

The wholesale price index decreased 0.3% to 283.7 from 284.5 for the previous week. For the year so far average inflation was 15.00% compared to 5.65% in the same period a year ago.

Rupee edged higher 14 paisa to 45.82 against one dollar.

Shipping companies advanced after freight rate index for container shipment surged in London trading. Great Eastern Shipping increased 1.9% and Mercator Lines added 3.3%.

Gainers & Losers

Ashok Leyland increased 2.1% to Rs 53.90 after the commercial vehicle sales surged 142.5% to 7,869 units a year ago.

Bhushan Steel Limited fell 0.2% to Rs 1,661.65 after the Income Tax Department has raided the company offices and unlisted unit Bhushan Power & Steel.

Crompton Greaves Limited rose 1.7% to Rs 449.00 after the brokerage India Infoline set target price of Rs 466.

Jet Airways (India) Limited dropped 1.7% to Rs 487.85.

KNR Constructions Limited fell 0.07% to Rs 135.25 after the infrastructure project development firm said the company in consortium with two other firms has secured a project worth Rs 225.27 crore from the Bihar Government for renovation of Eastern Kosi Canal System.

Marg Limited gained 6.6% to Rs 194.75 after the company announced its wholly owned subsidiary Karaikal Port Pvt. Ltd. into a shareholder agreement with India Infrastructure Fund for a proposed investment of Rs. 150 crores in KPPL.

Punj Lloyd Limited declined 2.1% to Rs 177.70 engineering and Construction Company has received contract for project of Rs 10.23 billion from Dhariwal Infrastructure, Kolkata, and an RPG Group Company.

Sesa Goa Limited gained 4.1% to Rs 442.90 an iron ore producer and exporter traded at a record price as iron ore prices surge.

Shree Renuka Sugars Limited fell 0.3% to Rs 170.50 after the company recovers after fixing record date for bonus.

Sterlite Industries (India) Limited decreased 0.1% to Rs 810.00.

Sterlite Technologies Limited rose 1.9% to Rs 438.40 ahead of record date for bonus, stock-split.

Suzlon Energy Limited added 1.6% to Rs 75.65 after the company said it received an order to set up and operate a 52.5 megawatt wind energy project from Gujarat State Petronet Ltd., a unit of the Gujarat State Petroleum Corp. Ltd. Group.

Titan Industries Limited added 3.0% to Rs 1,865.65 after the company guided annual sales in the next fiscal year to increase to 25% from 17% in the current year.

Wockhardt Limited rose 0.8% to Rs 145.50 after the company got final approval from US Food & Drug Administration for Levetiracetam oral solution.