Inflation does not
seem to come down in the near term despite global slowdown has pulled prices of
crude oil, metals and few dollar priced commodities. Domestic front, the government
may be forced to rise diesel prices to avoid any downgrade by rating agencies.
As per market, the government wants to raise diesel prices by Rs 5 a liter,
cooking gas by Rs 100 per cylinder and kerosene by Rs 2 a liter.
Additionally, food
prices are again heading for a big jump as Khariff output is expected to drop
by at least 20-25% due to below average rainfall.
Monsoon rain, the
lifeline of Indian agriculture, has been deficient by a 22 % so far. The situation is critical in Karnataka and central
Maharashtra. Average rain for the season has been pegged at 96 % of the LPA.
Rain less than 90% of the LPA would be a drought situation-- last seen in 2009
The global agriculture
output is also hit badly due to dry weather condition. Conditions are worse in
USA, Australia and Brazil.
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Ukraine
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Grain harvest
yields are expected to fall between 20 and 25 per cent on an average because
of dry weather. Crop affected: Wheat
|
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Russia
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Drought has hit 16
of Russia's regional areas, damaging 1.5 million hectares of crops in the
world's third-largest wheat exporter: Crop affected: Wheat
|
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USA
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Worst drought in
25 years; 61 per cent of continental US is facing moderate to exceptional drought,
damaging crops and pasture land. Crops affected: Corn & soy
|
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Argentina and
Brazil
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Drought caused by the
La Niña effect has hit agricultural production in Argentina and Brazil, among the largest
producers of corn globally Crops affected: Corn, wheat & soy
|
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Spain
|
Wheat yield forecasts
have been lowered after persisting dry conditions in the Iberian Peninsula. Crops
affected: Wheat & barley
|
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Korean Peninsula
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The worst drought
in a century has driven up vegetable prices in South Korea, and threatened crop
production in North Korea Crops affected: Wheat, barley & potato
|
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Sri Lanka
|
The state-run tea
board has scaled down its tea production outlook due to severe drought Crop affected: Tea
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India’s inflation
which is hovering about 7% is likely to touch double digit again under following
circumstances.
(For
information purpose)
