New Delhi, Jan 12 (IANS) India’s annual food inflation continued to be in the negative for the week ending Dec 31, official data showed Thursday on lower prices of vegetables, especially onions.

Food inflation had dipped into the negative last week for the first time in six years, giving relief to the common man and policymakers alike.

For the week ending Dec 31, annual food inflation fell to -2.9 percent, compared to -3.36 percent in the previous week, which was the lowest since April 2006.

The sharp decline in food inflation is partly because of the base effect and also improved supply of seasonal crops. During the corresponding week of last year, annual inflation was almost near 20 percent.

Data released by the ministry of commerce and industry showed the prices of vegetables were less than half during the week when compared to the prices in the corresponding week of last year.

Inflation in overall primary articles, which has a 20.12 percent weightage in the wholesale price index, rose to 0.51 percent in the week under review.

However, fuel and power inflation declined marginally to 14.45 percent as compared to 14.6 percent in the previous week.

Economists said the recent drop in food inflation and easing in overall inflationary pressure may prompt the central bank to cut interest rates and that food inflation was likely to remain near zero or in the negative territory till March.

The fall in food inflation has raised hopes of a decline in headline inflation based on the wholesale price index which, according to the latest available data, was recorded at 9.11 percent in November.

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

Onions: (-) 74.77 percent

Vegetables: (-) 49.03 percent

Fruits: 9 percent

Potatoes: (-) 31.97 percent

Eggs, meat, fish: 15.22 percent

Cereals: 2.03 percent

Rice: 1.7 percent

Wheat: (-) 3.35 percent

Pulses: 14.72 percent