Food inflation up at 16.44% on higher vegetables, fruits prices
Costlier vegetables and fruits pushed food inflation higher to 16.44 per cent as of May 1, despite arrival of winter crops in the market. Annual food inflation in the previous reporting week was 16.04 per cent. Special coveragebusiness Updated: May 13, 2010 15:38 IST
Costlier vegetables and fruits pushed food inflation higher to 16.44 per cent as of May 1, despite arrival of winter crops in the market.
Analysts, however, were of the view that the effect of fresh crop arrivals would be visible only in the second half of this fiscal -- by when it would also be clear whether or not the country would get a normal monsoon.
Annual food inflation in the previous reporting week was 16.04 per cent.
On an annual basis, pulses turned costlier by 32.49 per cent and fruits by 15.51 per cent. Week-on-week, potato turned expensive by 5.95 per cent, tea by five per cent, fruits and vegetables two per cent while urad, arhar, masur, and condiments and spices by one per cent each.
Prices of barley declined by 2 per cent and maize, ragi and jowar by one per cent each. "The trend of rising food inflation would continue for some more time till the effect of normal monsoon becomes visible. We expect some easing in the second half," rating agency Crisil Principal Economist D K Joshi said.
Yesterday, RBI deputy governor Subir Gokarn had said that overall inflationary pressure is starting to become visible.
Earlier this week, Finance Secretary Ashok Chawla said that overall inflation is likely to moderate to more acceptable levels on good rabi (winter) crop and better rainfall prediction.
Last month, RBI had hiked key policy rates to check the spread of price rise from food to non-food items. The rate hike was aimed at tempering demand for loans, which would in turn check consumer spending.
Wholesale price inflation touched a 17-month high of 9.9 per cent in March, higher than RBI's projection of 8.5 per cent. Data for April is due to be released on Friday.
Food Inflation had crossed 20 per cent in December but has remained volatile in the last few weeks.
Among non-food articles, sugarcane prices rose by 50 per cent during the reporting week, while raw cotton prices rose by 2 per cent.
Fuel index also rose due to a three per cent increase in lubricants prices and one per cent in furnace oil in the reporting week.