Food inflation soars, crosses double-digits

October 20th, 2011 - 1:40 pm ICT by IANS  

New Delhi, Oct 20 (IANS) India’s food inflation rose sharply to cross double-digit levels at 10.6 percent for the week ended Oct 8, official data showed Thursday, with a rise in demand for essential commodities in the festive season contributing to the upward pressure.

Food inflation had dipped marginally to 9.32 percent in the week ending Oct 1. The high levels of inflation also increase the likelihood of another rate hike by the Reserve Bank of India (RBI).

Food inflation had risen sharply since the week ending Sep 10 with spikes in some items being attributed to lower output because of heavy rains.

In the week under review, the primary articles index, which has a 20.12 percent weight in the wholesale price index, rose by 11.18 percent during the week under review as compared to 10.6 percent in the previous week, according to data made available by the commerce and industry ministry.

The index of fuel and power rose marginally to 15.17 percent.

During the week ended Oct 8, the index for non-food articles again showed a significant decline, growing at a slower rate of 8.51 percent as compared to 9.59 percent in the previous week.

Inflation has remained stubbornly high near double-digit since January 2010. The headline inflation based on the wholesale price index was recorded at 9.72 percent in September, according to the latest official data.

The RBI has already indicated that it will continue to raise rates till the point inflation begins to start coming down significantly. The stubbornly high inflation might prompt the RBI to hike policy rates again.

The central bank has hiked key policy rates 12 times since January 2010. However, that hasn’t helped in bringing down inflation much.

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

Onions: (-) 11.27 percent

Vegetables: 17.59 percent

Fruits: 12.39 percent

Potatoes: 1.73 percent

Eggs, meat, fish: 14.1 percent

Cereals: 4.73 percent

Rice: 4.42 percent

Wheat: (-) 0.18 percent

Pulses: 7.42 percent

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