The food price index rose 8 per cent in the week to November 19, its slowest pace in nearly four months and well below the 9.01 per cent rate reported in the previous week.

The sharp dip was despite an adverse base effect and the fact that most agricultural items, barring potatoes, onions and wheat, continued to move up on an annual basis.

While analysts expect some volatility in the price levels of food items to persist in the coming weeks, based on the supply-demand dynamics, the broad consensus is that the RBI keeping the policy rates unchanged in the upcoming mid-quarter review of the monetary policy.

Headline inflation has stayed above 9 per cent for the eleventh month, despite 13 rate increases by the central bank since March 2010. In its October review, the Reserve Bank of India had said if inflationary pressures started to abate by December, more rate increases may not be needed.

According to data released by the Ministry of Commerce and Industry on Thursday, the non-food articles index too eased sharply to slightly over 2 per cent on an annual basis during the latest reported week. Fuels, though, bucked the trend and climbed slightly.

Onions were down 41 per cent year-on-year, potatoes 11 per cent and wheat by close to 5 per cent. Apart from these, nearly all other food items surged upwards on an annual basis.

The data showed the index for ‘Food Articles’ group declined by 1.4 per cent to 195.7 due to lower prices of fruits and vegetables, ragi, fish, gram, poultry chicken and spices.

Inflation in the overall primary articles category stood at 7.74 per cent during the week ended November 19 against 9.08 per cent in the previous week. Primary articles have over 20 per cent weight in the wholesale price index.

Inflation in non-food articles, which includes fibres, oilseeds and minerals, was recorded at 2.14 per cent compared with 4.05 per cent. Fuel and power inflation stood at 15.53 per cent (15.49 per cent).

Related Topics
comment COMMENT NOW