Thursday, April 28, 2011

Food inflation rises marginally to 8.76%

Food inflation inched up marginally to 8.76 per cent for the week ended April 16 on the back of rising prices of fruits, protein-based items and onions.

Food inflation stood at 8.74 per cent in the previous week. This is the second consecutive week when the rate of price rise of food items has gone up after a period of moderation in February and March.

The latest rise, although marginal, will put more pressure on the government, which has described inflation as one of the major challenges facing the economy.

Earlier this month, Prime Minister Manmohan Singh had expressed concern about rising prices, especially of food items, and said the country needs to do more for ensuring the food security of its citizens.

During the week under review, fruits became dearer by 28.43 per cent year-on-year, while egg, meat and fish prices went up 12.14 per cent.

Onions became more expensive by 10.96 per cent on an annual basis. Milk also became dearer by 5.10 per cent. Similarly, cereal prices went up 4.49 per cent, while rice and wheat became dearer by 2.08 per cent and 0.48 per cent, respectively.

However, pulses bucked the trend and witnessed a decline of 6.49 per cent in their wholesale prices. Overall, vegetable prices were down 0.21 per cent and potatoes by 1.61 per cent.

Meanwhile, during the week under review, prices of non-food articles were up 26.48 per cent year-on-year. Fuel and power became dearer by 13.53 per cent, while petrol was up 21.81 per cent.

Food inflation stayed in high numbers for most of 2010 and early 2011 and was the major contributor to headline inflation, which has been above 8 per cent since February 2010.

Headline inflation stood at 8.98 per cent in March, way above the government's projection of 8 per cent.

The government and the Reserve Bank of India have exuded confidence that with a record harvest of wheat and pulses, the trend of increase in prices of food items would be reversed.

However, after the slight moderation of February and March, food inflation numbers have again started moving upward and experts say this could be a major issue for the government at a time when non-food core inflation has also shown signs of going up.


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