India’s food inflation declines to more than two year low (Lead)

July 21st, 2011 - 4:56 pm ICT by IANS  

Pranab Mukherjee New Delhi, July 21 (IANS) India’s food inflation declined to 7.58 percent for the week ending July 9 — its lowest in more than two years — as prices of onions, milk, eggs and meat eased, according to official data released Thursday.

Economists said the fall in food inflation to a 119-week low was mainly due to a low base in the like period of last year.

Food inflation had shot up for the week ending July 2.

The primary articles index also fell to 11.13 percent for the week under review, compared to 11.58 percent in the previous week, according to data released by the ministry of commerce and industry.

“If this declining trend continues, I do hope it will have a moderating influence on the price front,” Finance Minister Pranab Mukherjee told reporters here.

The index for fuels and power continued to hold steady at 11.89 percent for the week ended July 9. The index for non-food articles, however, rose 15.5 percent from 15.2 percent in the previous week.

Onion prices rose at a slower 19.68 percent year-on-year, compared to the rise of 30.72 percent seen in the previous week, while milk prices eased to 10.76 percent.

Eggs, meat and fish prices also grew at a slow 7.97 percent.

“With monsoon recovering lately in July (monsoon weakening in July was a key concern at the beginning of the season in June), the outlook improves for agricultural production and food prices, the latter to the extent of food prices remaining elevated due to production shortages,” said Jay Shankar, chief economist at Religare Capital Markets.

India posted its highest ever foodgrain production at over 241 million tonnes last fiscal.

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

Vegetables: 4.31 percent

Fruits: 15.84 percent

Potatoes: 4.2 percent

Cereals: 4.77 percent

Rice: 1.32 percent

Wheat: 2.4 percent

Pulses: (-) 7.67 percent

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