Good rabi and kharif harvests combined with the base effect could temper inflation at a more acceptable

5-6% in the coming year, says economist Madan Sabnavis but supply distortions, weather anomalies and a falling rupee could queer the pitch. Food apart, the commodity for which many had to pay through their nose was gold -- the one thing almost every Indian aspires for at marriages, and during festivals like Dhanteras and Diwali. Global economic events throughout much of the year took the sheen off traditional investment assets like equities and debt securities and shifted investor interest towards gold, which rallied to a record $1921 an ounce in September. This impacted the local prices and hurt demand for jewellery and medallions. While overseas prices have corrected 20%, they are expected to bounce back in the new year on fresh fund flows. Read on to find out what you could expect in 2012... No worries for tea fans The year 2011 saw no cutback in tea consumption even while prices at auctions went up by Rs 510 per kg. "Our cost of production increased but prices at the retail level were up by 3-4% in 2011. And this trend is likely to continue in the new year. At the end of the day, tea continues to be the common man's drink and there cannot be a sudden price jump," said CS Bedi, chairman of Indian Tea Association. Added DP Maheswari, managing director of Jay Shree Tea & Industries, "We do not intend to increase packet tea prices in a manner that will hurt the common man who is already saddled with inflationary pressure." In the current financial year, the country is expected to produce 990 million kg of tea. If weather remains favourable, production could cross the 1,000-million-kg mark in FY13. Exports in FY12 are expected to be around 150 -160 million kg. Milk, a preferred choice Consumers may expect fewer nasty surprises in 2012. In the past three months (called the flush season), milk production was very high compared with the same period last year. Increased consumer demand and a fall in output forced producers raise full cream prices by a record 3040% to Rs 40 a litre since October 2010. In 2012, an average price increase of 8-10% is estimated owing to an increase in demand for not just milk but for its byproducts like cheese, paneer, dahi, flavoured milk and lassi. Consumption of these products has risen in urban centres and smaller towns and cities as well. Edible oil on the boil Cooking oil prices are unlikely to cool down in 2012. According to market sources, edible oils are likely to rise 10% by the end of the next quarter due to higher import prices. A drastic depreciation of the rupee has made the commodity expensive as India imports nearly half of its of edible oil requirement. The overall consumption is estimated at around 15.5 million tonne.

Soaring food, fuel, gold and silver prices singed consumer wallets in 2011. Double-digit food price inflation was the trend through much of the year with respite coming only recently -- food price inflation plunged to a six-year low of 0.4% in the week ended December 17 -- that too because of a high base effect.