Onion, milk prices keep India’s annual food inflation high

December 9th, 2010 - 3:57 pm ICT by IANS  

Pranab Mukherjee New Delhi, Dec 9 (IANS) After falling to a four-month low, India’s annual food inflation rose again to 8.69 percent for the week ended Nov 27, as prices of onions, milk, fruits, meat and poultry continued to rule high, commerce ministry data showed Thursday.

The food inflation rate, based on the official wholesale price index, had dropped to a four-month low of 8.6 percent for the week ended Nov 20, apparantly due to the further tightening of monetary policy by the country’s central bank.

In fact the 52-week inflation rate for non-food articles stood at a worrying 23.46 percent, while that for primary articles and fuels stood at 12.66 percent and 9.99 percent respectively.

The following is the rise and fall in prices of some of the main commodities that form the sub-index for food articles over the past 52 weeks:

Cereals: 0.66 percent

Rice: 1.6 percent

Wheat: (-)3 percent

Pulses: (-)10.91 percent

Vegetables: (-)3.42 percent

Fruits: 18.31 percent

Milk: 17.76 percent

Potatoes: (-)45.40 percent

Onions: 25.48 percent

Earlier this week, Finance Minister Pranab Mukherjee had termed inflation a big concern and said the annual rise in prices was likely to come down to 6 percent by the end of the current fiscal.

“Inflation is coming down. Now it is in the single digit but I would like further easing. I am hoping that by March it will be around 6 percent. But it should come down further,” Mukherjee said.

Despite some moderation in the past few weeks, the inflation rate is still much above the central bank’s comfort level despite its aggressive tight money policy since January.

The apex bank had hiked both its short-term borrowing and lending rates by 25 basis points each Nov 2, tweaking its policy rates for the sixth time since the start of this calendar year to curb inflationary expectations.

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