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Inflation leads to high prices in India

01-31-2011 08:18 BJT

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Inflation in India has contributed to the country's skyrocketing food prices, and even caused the so-called onion crisis.

As Laurie Lew tells us, the rising cost of tea, has scaled down the buying capacity of consumers, in the eastern state of West Bengal.

Tea producers and traders say they have been forced to increase prices because of increasing costs of production and the growing prices of various essential commodities, which contribute to the production of tea.

Ravi Aggarwal, Tea Producer, said, "When the cost goes up, although it has nothing to do with the end product, while you are selling a product, which is totally dominated by demand and supply. But, this year we have seen that there is a global shortage of tea and mainly for that the price of tea has also moved up."

The tea producers and traders add that the price of tea has increased by 20 percent this year out of which 5-10 percent is because of rising inflation.

Customers say they are having to cut their budgets and the quality, too, by a significant margin.

Rajeev Kumar, Customer, said, "Tea is a product, which is, used daily in every household. We have scaled down our budget. Inflation has directly affected the tea industry whether it is packed tea or loose tea."

The federal government has already taken up a series of measures, from banning onion exports to freezing sugar exports, but food inflation has remained stubbornly high despite policymakers' forecasts of a slowdown.

The country's central bank, the Reserve Bank of India, has already raised its key rate six times since March 2010 in a bid to tame prices.

 

 

Editor:Zhang Pengfei |Source: CNTV.CN

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