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Food inflation at 7-week low of 7.61%

Last updated on: July 7, 2011 13:40 IST

Food inflation at 7-week low of 7.61%

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Food inflation in the country fell to a seven-week low of 7.61 per cent for the week ended June 25 on the back of cheaper vegetables, pulses and potatoes.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 7.78 per cent during the previous week. It was almost 20 per cent during the comparable period of June, 2010.

As per data released by the government on Thursday, pulses became over 9 per cent cheaper year-on-year during the period under review.

Prices of vegetables also came down by 8.74 per cent, while potatoes became 2.13 per cent cheaper on an annual basis.

However, prices of other food items remained high during the week.

Fruits became 22.75 per cent more expensive, while onions became dearer by 21.24 per cent year-on-year.

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Photographs: reuters
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Food inflation at 7-week low of 7.61%

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Eggs, meat and fish prices were up by 10.12 per cent and cereals by 4.26 per cent. Milk was 12.10 per cent costlier on an annual basis.

The latest numbers on the rate of price rise of food items are the lowest since the week ended May 7, when food inflation stood at 7.47 per cent.

Headline inflation in the country stood at 9.06 per cent in May. Finance Minister Pranab Mukherjee had on Wednesday cautioned against the "suppressed component" of inflation.

"There is a significant suppressed component of inflation as the increase in international crude oil prices has not been passed on completely despite increase in domestic administered oil prices effected in June, 2010, and June, 2011," he said.

Meanwhile, inflation in overall primary articles stood at 11.56 per cent for the week ended June 25, down from 11.84 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI basket.

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Photographs: Reuters
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Food inflation at 7-week low of 7.61%

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Inflation of non-food primary items stood at 17.69 per cent, down from 17.91 per cent in the previous week.

However, the hike in prices of diesel, cooking gas and kerosene announced on June 24 week by the government is yet to be reflected in these numbers.

The only exception was LPG, which became dearer by 14.58 per cent. The inflation index for LPG stood at 11.31 per cent during last few weeks.

Fibres were up 38.05 per cent on an annual basis, while minerals became more expensive by 27.87 per cent.

Fuel and power became more expensive by 12.67 per cent year-on-year.

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Photographs: Reuters
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Food inflation at 7-week low of 7.61%

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The RBI had said that headline inflation in the next few months would be driven more by high global commodity prices, rather than prices of food items, as was the case in 2010.

Food inflation was in double digits for most of 2010, before showing signs of moderation since March this year.

The fall in food inflation numbers is likely to come as a relief to the government, which had to deal with a series of bad news during recent weeks on the economic front.

While January-March economic growth stood at 7.8 per cent, the lowest in five quarters, industrial output also slowed down to 6.3 per cent in April.


Photographs: Reuters
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