<p>Prices of vegetables surged 25 per cent and fruits were costlier by around 12 per cent putting further pressure on the authorities to tackle rising prices and the demand and supply mismatch. High prices of milk, egg, meat and pulses also kept pressure on food inflation, which rose to the highest level in over six months, the government data showed Thursday. <br /><br />Food inflation figure for the week ending October 8 was 10.60 per cent.<br /><br />The price pressure on perishable items, particularly fruits, meat, milk, eggs and fish continued due to supply mismatch with the rising demand of such items. The imbalance has worsened by rising rural wages and consequent demand pressure from rural India and the absence of growth in agricultural productivity.<br /><br />Fuel prices have indeed contributed to food price hike. Although crude prices have declined in recent times on the international market, the benefit has been offset by the fall in the value of the Indian rupee. The rupee breached Rs 50 a dollar last week, making imports especially crude oil costlier, fanning fears of higher inflation and widening of the subsidy bill of the cash-strapped government.<br /><br />Besides, there are structural factors contributing to high food inflation in India, such as, the creaking food distribution and storage system. The Reserve Bank of India (RBI) has taken steps in the past and raised key policy rates as many as 13 times in the past 12 months to tame inflation, but they have had little impact on arresting food inflation. <br /><br />On the contrary, costlier loan has hampered the economic growth rate in the first quarter of current fiscal.<br /><br />According to RBI Governor D Subbarao, lower production of pulses and inadequate supply of protein-based food may put further pressure on food prices in the near term.<br /><br />Pulses became dearer by 9.06 per cent and cereal prices were up 4.62 per cent year-on-year for the week under review. But the effect of good monsoon and the government’s efforts to manage the demand and supply mismatch appeared to be yielding results in some areas with wheat prices for the week under review coming down 0.95 per cent. Onion also became cheaper -- close to 19 per cent and a downward movement was also seen in potato prices. The primary articles price index was up 11.75 per cent, compared with an annual rise of 11.18 per cent a week earlier despite RBI’s continued efforts to raise key policy rates to tame inflation.<br /><br />The Central bank raised rates for the 13th time on Tuesday to fight inflation that topped 9 per cent for nearly a year. The government and policy makers are of the view that headline inflation will start moderating from December and come close to 7 per cent by March 2012. The WPI inflation, which stayed above 9 per cent this year, climbed 9.72 per cent in September.<br /><br />Searing the pocket<br /><br />* Food inflation for week ending Oct 8 was 10.60 pc<br />* Prices of vegetables have surged 25 per cent<br />* Fruits costlier by about 12 per cent<br />* Pulses have become dearer by over 9 pc and cereal prices by nearly 5 pc<br />* Prices of milk, egg, meat and pulses have also gone up<br />* Low production of pulses and inadequate supply of protein-based food may put <br />further pressure on food prices</p>
<p>Prices of vegetables surged 25 per cent and fruits were costlier by around 12 per cent putting further pressure on the authorities to tackle rising prices and the demand and supply mismatch. High prices of milk, egg, meat and pulses also kept pressure on food inflation, which rose to the highest level in over six months, the government data showed Thursday. <br /><br />Food inflation figure for the week ending October 8 was 10.60 per cent.<br /><br />The price pressure on perishable items, particularly fruits, meat, milk, eggs and fish continued due to supply mismatch with the rising demand of such items. The imbalance has worsened by rising rural wages and consequent demand pressure from rural India and the absence of growth in agricultural productivity.<br /><br />Fuel prices have indeed contributed to food price hike. Although crude prices have declined in recent times on the international market, the benefit has been offset by the fall in the value of the Indian rupee. The rupee breached Rs 50 a dollar last week, making imports especially crude oil costlier, fanning fears of higher inflation and widening of the subsidy bill of the cash-strapped government.<br /><br />Besides, there are structural factors contributing to high food inflation in India, such as, the creaking food distribution and storage system. The Reserve Bank of India (RBI) has taken steps in the past and raised key policy rates as many as 13 times in the past 12 months to tame inflation, but they have had little impact on arresting food inflation. <br /><br />On the contrary, costlier loan has hampered the economic growth rate in the first quarter of current fiscal.<br /><br />According to RBI Governor D Subbarao, lower production of pulses and inadequate supply of protein-based food may put further pressure on food prices in the near term.<br /><br />Pulses became dearer by 9.06 per cent and cereal prices were up 4.62 per cent year-on-year for the week under review. But the effect of good monsoon and the government’s efforts to manage the demand and supply mismatch appeared to be yielding results in some areas with wheat prices for the week under review coming down 0.95 per cent. Onion also became cheaper -- close to 19 per cent and a downward movement was also seen in potato prices. The primary articles price index was up 11.75 per cent, compared with an annual rise of 11.18 per cent a week earlier despite RBI’s continued efforts to raise key policy rates to tame inflation.<br /><br />The Central bank raised rates for the 13th time on Tuesday to fight inflation that topped 9 per cent for nearly a year. The government and policy makers are of the view that headline inflation will start moderating from December and come close to 7 per cent by March 2012. The WPI inflation, which stayed above 9 per cent this year, climbed 9.72 per cent in September.<br /><br />Searing the pocket<br /><br />* Food inflation for week ending Oct 8 was 10.60 pc<br />* Prices of vegetables have surged 25 per cent<br />* Fruits costlier by about 12 per cent<br />* Pulses have become dearer by over 9 pc and cereal prices by nearly 5 pc<br />* Prices of milk, egg, meat and pulses have also gone up<br />* Low production of pulses and inadequate supply of protein-based food may put <br />further pressure on food prices</p>
