Economy

Food inflation rises on dearer fruits, eggs, meat

| | Updated on: Apr 28, 2011
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Food prices continued to remain high, increasing expectations that the central bank will hike its policy rates at a review next week.

Food inflation, based on the Wholesale Price Index, increased 8.76 per cent during the week ended April 16, marginally up from the previous week's annual rise of 8.74 per cent. The latest inflation estimate is the highest reading in three weeks, after a brief downward trend seen in March. The fuel price index climbed 13.53 per cent during the latest week from 13.05 per cent a week ago, Government data on Thursday showed.

According to the data, the primary articles price index was up 12.08 per cent, compared with an annual rise of 11.96 per cent a week ago. It gained 0.1 per cent sequentially. The fuel products index increased 0.6 per cent week-on-week.

The Reserve Bank of India's rate decision is scheduled for Tuesday. Analysts broadly expect the RBI to raise its lending and borrowing rates (repo and reverse repo) by a quarter percentage point each, after having raised them eight times since March 2010.

There is also a view that the central bank might have to hike the rates by double that to effectively tackle runaway prices.

During the week under review, fruits were up over 28 per cent year-on-year, while egg, meat and fish surged by 12 per cent and onions by 11 per cent.

According to the data, milk was up over 5 per cent, cereal by over 4 per cent, while rice and wheat rose by 2.08 per cent and 0.48 per cent respectively. However, pulses bucked the trend and showed a dip of 6.49 per cent. Overall, vegetable prices were down marginally by 0.21 per cent, with potatoes easing by 2 per cent.

Among fuels, petrol was up 21.81 per cent.

Published on May 01, 2011

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