Food prices fall globally, but keep rising in India

New Delhi: When it comes to slower economic growth, the government never fails to point out the problems in the global economy but there seems to be little link between Indian and international food prices.      Latest data released by the United Nation's Food and Agriculture Organization shows that the Food Price Index fell 3.5% in December 2013, compared to a year ago. For the full year, the index averaged 209.9, which was 1.6% lower than 2012, the Rome-based agency said. In November 2013, the Food Price Index fell 4.4%.      While the government will release the consumer and wholesale price inflation numbers next week, food inflation based on the WPI was estimated at close to 20% in November 2013. By all accounts, with vegetable prices coming down in December, food inflation is expected to moderate but there is no way it is going into low double-digits, at least at the moment.      High rate of inflation, especially for food products, has been identified as a key reason for the Congress's drubbing in the recent state elections. High inflation and low growth in recent years have emerged as a major headache for households. At his press conference last week, prime minister Manmohan Singh had put much of the blame on the global economy and international commodity prices.      Barring dairy products, where there has been a spurt in prices in recent months, internationally prices of other food groups tracked by FAO remain subdued. In fact, sugar and cereal prices slumped significantly in December, while meat stayedflat and vegetable oil was 1.4% more expensive in November and 2.8% costlier in December, the FAO said.      The high demand for milk powder, especially from China, has prompted processors to focus on it, ignoring butter and cheese, which has resulted in high price for dairy products.      Prices of cereals are at their lowest level since August 2010 as good wheat and maize harvests have kept prices subdued. It is the government's decision to hold on to record public stocks that has resulted in high prices in India.  Times View: Those who grew up in India in the seventies and early eighties would remember how the 'foreign hand' would frequently be invoked by Indira Gandhi to explain away political turmoil and strife. Of late, we have been seeing an economic variant of the mantra with the government always keen to blame the 'external environment' for the country's woes. As this report shows, some of the most pressing economic problems we face have little to do with the global situation. The government would do better to focus on tackling problems that are homegrown rather than lamenting those beyond its control.