About Increase in Consumption & Prices

In the BW opinion column in Business World issue for the week 17-23 April 2007, there is an interesting statistics about sugar consumption in India. It says

As people have got more money in their pockets, they have been eating more sweets. Sugar output has responded to the demand. From 13 million tonnes in 2004-05, it increased to 19.3 million tonnes in 2005-06. But it could not keep up with demand. Sugar price, which was in the range of Rs 17-21 a kg in January 2005, had risen to Rs 21-23 by the middle of 2006

You can read the entire article at Procurers in Trouble This is shocking given that India is the diabetic capital of the
world and I see more and more people getting health conscious et.al. Leaving this serious thing aside, this points to the raising demand being the culprit for inflation. If increase in income levels can have close to 50% increase in sugar consumption over 2 years, imagine the increases in consumption of rice/wheat, pulses, cerels, vegetables etc.

If these statistics are really correct, the retail trade volume could really triple over the next 8-10 years, resulting in growth for both organized and unorganized retail

Kumar Vembu