Food inflation dips marginally

Food inflation dips marginally

Food inflation had risen to the highest level in nine months last week at 12.21 percent. It's been a month since food inflation breached the double digit levels.

Prices of pulses, vegetables and milk and poultry rose.
The spike in food inflation in the four weeks of October, for which data is available, has been attributed to a rise in demand as the month had many important festivals, raising demand.

Overall inflation too has remained stubbornly high, near double digits, since January 2010.

Headline inflation based on the wholesale price index was recorded at 9.72 percent in September, according to the latest official data.

To contain inflation, the Reserve Bank of India (RBI) has hiked key interest rates 13 times since early 2010, but the frequent tightening has not had much impact on soaring prices.
The central bank, in its last rate hike, said that it may not take such an action further because it expected inflation to fall from December.

Rising interest rates has been one of the main reasons, says industry, for a slump in industrial output. In September, the index of industrial production (IIP) rose by a sluggish 1.9 percent, while for the half year this fiscal it grew by only 5 percent.

In the week under review, the primary articles index, which has a 20.12 percent weight in the wholesale price index, rose by 11.43 percent during the week under review as compared to 12.08 percent in the previous week, according to data made available by the commerce and industry ministry.

During the week ended Oct 29, the index of fuel and power remained unchanged at 14.5 percent, while the index for non-food articles declined marginally to 6.41 percent.

The following are the yearly rise and fall in prices under review of some main commodities that form the sub-index for food articles:
Onions: (-) 19.31 percent
Vegetables: 26.05 percent
Fruits: 11.7 percent
Potatoes: 0.53 percent
Eggs, meat, fish: 12.74 percent
Cereals: 4.07 percent
Rice: 4.27 percent
Wheat: (-) 1.77 percent
Pulses: 13.27 percent