Declining trend in commodity prices

Commodity prices which were sky rocketing due to supply constraints have begun declining. Director Price and Wages of the Department of Census and Statistics (DCS) D.C.A. Gunawardena said that vegetable prices slightly declined last week. He said that prices of items such as red onions have declined with supplies reaching from Jaffna. The DCS regularly monitors consumer prices in Colombo markets.

The wholesale price of many commodities declined with imports from India which arrived at the Pettah market

Meanwhile inflation figures for February reflect the impact of high commodity prices that prevailed last month.

Annual average inflation, for February as per the Colombo Consumer Price Index (CCPI) (2002=100), increased to 6.1 percent in February from 6.0 percent in January. Year-on-year basis, inflation increased to 7.8 percent.

However, the core inflation, both in terms of year-on-year and annual average bases decelerated further to 2.9 percent and 5.5 percent, in February 2011 compared to 3.6 percent and 6.06 percent in January, according to the Central Bank. This reflects the stability in the general price level because in calculating core inflation it excludes certain items that face volatile price movements.

Increase in inflation is mainly due to the increase in prices of most varieties of vegetables, coconut, coconut oil, red onions and rice, the Central Bank said. However, the price of many commodities showed a declining trend last week.

Wholesellers of the Pettah market said that the wholesale price of many commodities have declined compared to the previous week. Red and white Kekulu rice declined from Rs.58-59 to Rs.54-55 last week.

The wholesale price of Samba No.1 was Rs.69, Samba No.2 Rs.68, Samba Kekulu (White) No.1 Rs.69, Red Samba Rs.69, Red Nadu Rs.59, Keeri Samba No.1 Rs.98 and Keeri Samba No.2 Rs.95.

Big onion and red onion prices too have declined with imports from India being restored. The wholesale price of Indian big onions was recorded at Rs.95/kg while Pakistani big onions was sold at Rs.75/kg. Red onions and chilie imports from India too have been instrumental in bringing down market prices.

The price of red onions which was over Rs.400/kg a week ago has declined sharply. The wholesale price of Indian red onions was Rs.95-100 last week and the supply from Jaffna was Rs.80/kg, traders said.

Traders said that the main reason for decline in prices is that India has relaxed export restrictions on food items.

They said that rice prices have declined with Maha season harvesting and this trend will be temporary. Prices will increase again by mid March unless the government allows rice imports.

GW