Cabinet reviews prices of essential food items

New Delhi, Feb 3 (PTI) With food inflation crossing 17per cent, the government today reviewed the price situation atthe highest level and considered various options to containrising prices of essential items.

The Cabinet Committee on Prices (CCP), presided by PrimeMinister Manmohan Singh, met here to take stock of the foodinflation which has hit the common man hard.

While no official comment was available about the outcomeof the CCP meeting, a source said that high milk prices, amongother things, came up for discussion.

Driven by high prices of vegetables, fruits, milk andeggs, food inflation increased for the second week in a row,to 17.05 per cent for the week ended January 22.

Although vegetable prices are likely to moderate in thecoming weeks, experts believe that rates of protein-based fooditems like milk, fish and egg are expected to remain firm.

Among vegetables, onion prices on annual basis rose by130.41 per cent in the third week of January, although theyhave moderated considerably in the recent days.

Vegetables as a whole became dearer by 77.05 per cent onan annual basis followed by fruits (15.47 per cent), egg, meatand fish (15.05 per cent), milk (11.41 per cent) and potato(6.22 per cent).

As regards milk, the options available with the Centreinclude allowing more imports for skimmed milk powder (SMP) atzero duty by co-operatives like NDDB, parent body of MotherDairy.

NDDB was last year allowed to duty-free import of 30,000tonnes of milk powder. However, any import over and above thislimit is subject to a basic custom duty of 60 per cent, whichmight also be reduced.

Last month, the government had withdrawn duty benefits onexports of milk products like SMP and casein to augmentdomestic availability and curb prices.