Food inflation comes down sharply (Lead)

June 30th, 2011 - 5:56 pm ICT by IANS  

Manmohan Singh New Delhi, June 30 (IANS) In what could come as a respite to consumers and policymakers, India’s food inflation slipped to 7.78 percent for the week ending June 18, compared to 9.13 percent recorded in the previous week, official data showed Thursday.

Food inflation had risen to a two-month high last week.

As per data released by the commerce and industry ministry, the primary articles index fell to 11.84 percent compared to 12.62 percent in the previous week.

“Food inflation for the week-ended 18th June moderated to 7.8 percent year-on-year from 9.13 percent. The favourable base effect is helped by some week-over-week fall in prices of potatoes and rice,” said Jay Shankar, chief economist - director with Religare Capital Markets Ltd.

The index for fuels and power, however, rose to 12.98 percent.

The dip in the food inflation figures should give some assurance to the Reserve Bank of India which has been hiking interest rates consistently since March 2010 to bring down prices, the latest being in June.

At the retail level, however, consumers are still paying higher for their daily needs.

“Every thing has become costly. Milk, eggs, fruits all that we need daily has become quite costly. Tomato prices have especially gone up in the last week,” said Poornima Dayal a home maker from Vasant Kunj in South Delhi.

Last data for headline inflation showed the whole sale price index rising by 9.06 percent in May.

In an interaction with editors of select publications Wednesday Prime Minister Manmohan Singh said inflation would come to 6.5 percent by the end of the current fiscal if international oil prices soften and commodity prices do not rise further.

The following are the yearly rise and fall in prices of some main commodities that form the sub-index for food articles:

Onions: 16.08 percent

Vegetables: (-) 10.08 percent

Fruits: 24.76 percent

Potatoes: (-) 2.39 percent

Eggs, meat, fish: 10.32 percent

Cereals: 4.76 percent

Rice: 2.01 percent

Wheat: 0.24 percent

Pulses: (-) 9.5 percent

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