Business

Surge in commodity prices to impact India’s economy: Ind-Ra

Surge in commodity prices to impact India’s economy: Ind-Ra
New Delhi, Apr 3 (IANS) | Publish Date: 4/3/2021 1:00:36 PM IST

Further surge in global commodity prices will have serious implications for India’s economy which is still struggling to come out of the Covid-19 impact, ratings agency Ind-Ra said. As per Ind-Ra, a higher retail inflation not accompanied by a commensurate increase in wage growth will adversely impact the consumption demand and in turn investment revival in the economy.

“Though a spike in global agricultural commodity prices could benefit India, it may not move the needle favourably because India, despite the world’s biggest exporter of Basmati rice, exported just $6.59 billion worth of cereals and imported vegetable oil and pulses worth $9.66 billion and $1.44 billion, respectively, in FY20.”

“On the other hand, India’s import bill on oil, coal and nonferrous metals was $129.86 billion, $22.45 billion and $13.14 billion, respectively.”

According to the agency, a faster-than-expected recovery in demand, the stimulus measures announced by the US, the roll out of Covid-19 vaccine and ultra-low interest rates are fuelling the surge in commodity prices.

Consequently, energy commodity prices over the past six months have increased by 55.4 %, the increase in non-energy commodity prices is 19.3 %. Among the major non-energy subgroups, agricultural commodities rose by 16 %, fertilisers 30.2 % and metals and minerals by 25.1 %.

On a more disaggregated level, the prices of copper, aluminium, tin, nickel and zinc have gone up by 26.3 %, 19.2 %, 46.6 %, 25.1 % and 12.4 % respectively. 

In addition, it warned against a commodity super cycle. This phenomenon occurs as a “long-term, above-trend movements in a wide range of base material prices, driven by a structural change in demand”.

The last such super cycle started in early 2000 and lasted till the global financial crisis of 2008.


-Tags:#Ind-Ra

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

Desk:+91-3862-248 489, e-mail: npdesk@gmail.com Fax: +91-3862-248 500
Advt.:+91-3862-248 267, e-mail:npostadvt@gmail.com

QUICK LINKS

SUNDAY POST

Join us on

© Nagaland Post 2018. All Rights are Reserved
Designed by : 4C Plus