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Food inflation surged yet again to inch closer to the double-digit mark in mid-August, even as price levels in case of fuels remained steady.
The annual Wholesale Price Index-based food inflation estimates rose 9.8 per cent during the week ended August 13, up from the 9.03 per cent year-on-year increase reported in the previous week.
Items such as onions, potatoes, fruits and protein-based items contributed to the upward surge in the latest food inflation estimates. The fuel price index climbed 13.13 per cent, the same level as in the previous reported week.
Bad news, says Pranab
Reacting to the latest estimates, the Finance Minister Mr Pranab Mukherjee expressed concern on the rise in food inflation.
“It is bad news that inflation has increased... I am more concerned about food inflation, which is near double digits...” He, however, maintained that the weekly inflation figures are variant and an assessment should be made on the basis of a relatively longer period.
Data released by the Government on Thursday showed that the primary articles index too was sharply up 12.4 per cent, compared with an annual rise of 11.64 per cent a week earlier. Primary articles have a share of over 20 per cent in the WPI.
According to ICRA, the price index for fruits and vegetables could display a further rise in the week ended August 20, mainly on account of supply disruptions in some areas following heavy monsoon rainfall during that week.
“Nevertheless, the compression in the deficit of cumulative rainfall to 1 per cent below the long period average suggests an improved outlook for the agricultural sector in the current year.”
The latest data showed that onions soared by over 44 per cent year-on-year, while potatoes were up 16 per cent during the week under review. Fruits were up over 27 per cent and eggs, meat and fish by 13 per cent on an annual basis.
According to the data, milk was up 10 per cent during the latest reported week, while vegetables and cereals were up 7 per cent and 5 per cent, respectively.
Inflation in non-food articles, which include fibres, oil seeds and minerals, surged 18 per cent, compared with 16 per cent in the previous week.
The RBI has raised interest rates 11 times since March 2010 to tame headline inflation, which was recorded at 9.22 per cent in July.
“It is bad news that inflation has increased... I am more concerned about food inflation, which is near double digits...”
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