Veggies get cheaper, food inflation drops to 4-yr low | business | Hindustan Times
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Veggies get cheaper, food inflation drops to 4-yr low

business Updated: Dec 23, 2011 02:02 IST
HT Correspondent
HT Correspondent
Hindustan Times
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The food inflation rate fell steeply to a 46-month-low of 1.81% during the week ended December 10, continuing the dramatic fall from 11.43% in mid-October as fresh arrivals of seasonal vegetables bolstered supplies and pushed down prices.



Onion prices during the week fell to about 50% of last year’s levels, when the vegetable’s price had skyrocketed to record levels.



Since the food inflation rate tracks the difference in food prices in comparable weeks over two years (example: 50th week of this year vs 50th week of last year), the difference in onion prices magnified the fall in the rate.http://www.hindustantimes.com/Images/HTEditImages/Images/23-12-pg01c.jpg

Prices of vegetables dropped during the week compared to last year bringing down overall food inflation, although protein-rich items such as pulses, milk, egg, meat continued to grow a fast clip. India's macro-economic managers were cautious in responding to the latest price data, which had prompted the RBI to signal pause in its interest rate hiking cycle.