Food inflation slows on cheaper pulses, vegetables

Our Bureau New Delhi | Updated on May 12, 2011 Published on May 12, 2011

Cooling effect: People baying vegetables in western suburbs of Mumbai on Thursday. A fall in prices of vegetables and pulses saw the rate of inflation dropping to 7.7 per cent for the week ended April 30. - Paul Noronha   -  Business Line

Food inflation, based on the annual Wholesale Price Index, rose 7.70 per cent during the week ended April 30, lower than

Food inflation, based on the annual Wholesale Price Index, rose 7.70 per cent during the week ended April 30, lower than the previous week's annual rise of 8.63 per cent.

The slide, aided by a base effect, was largely on account of a downward trend seen in items such as pulses, milk, poultry products and vegetables including onions and potatoes.

During the corresponding week a year ago, food inflation had been recorded at well above 21 per cent.

Fuel index eases

The Fuel index, too, eased a bit, climbing 12.25 per cent year-on-year during the latest reported week as against a much higher 13.53 per cent a week before, according to data issued by the Ministry of Commerce and Industry on Thursday.

Reflecting the downtrend, the Primary Articles index also rose 11.96 per cent during the latest week compared with an annual rise of 12.11 per cent a week ago.

On the data, the Finance Minister, Mr Pranab Mukherjee, said: “The current trend in food inflation is welcome and we hope to see further moderation in food inflation in the coming weeks... However, there are concerns on price momentum in non-food articles.”


During the week under review, pulses were down by 9.05 per cent on a year-on-year basis, while vegetables slipped by 3.64 per cent, mainly on account of potatoes and onions.

“Sustained high non-food primary prices are creating cost-push inflationary conditions in the manufacturing sector. Thus, even though food inflation is declining, the concern on higher core inflation remains,” Mr Mukherjee said.

During the week under review, inflation in non-food primary articles was recorded at over 28 per cent. Fibres rose almost 86 per cent and minerals by 11.95 per cent.

The RBI had hiked interest rate by 50 basis points earlier this month to tame demand and control inflation.

It was the ninth hike in short-term lending and borrowing rates made by the central bank since March 2010.

Headline inflation

Headline inflation was 8.98 per cent in March, much above the Government's comfort zone of around 5 per cent and even higher than February's 8.31 per cent. The monthly data for April are slated to be released on May 16.

In its monetary policy for 2011-12, the RBI had projected inflation to average 9 per cent during the first half of this fiscal before moderating to around 6 per cent by the year-end.

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Published on May 12, 2011
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