Food inflation soared to over 6-month high of 11.43% for the week ended October 15, as prices of vegetables, fruits and milk went through the roof, hitting the common man.
Food inflation soared to over 6-month high of 11.43% for the week ended October 15, as prices of vegetables, fruits and milk went through the roof, hitting the common man.
While the vegetables became 25% costlier on an annual basis, fruits grew dearer by 11.96%, milk by 10.85% and eggs, meat and fish by 12.82%, said the food inflation data released today.
Food inflation, as measured by Wholesale Price Index (WPI), was at 10.60% in the previous week. This double-digit inflation comes on top of a very high level of price rise recorded in October last year, when it stood at 14.20% -- already a "high-base" comparison.
The last time that food inflation stood this high was on April 9 when it was recorded at 11.53%. According to the data, even pulses and cereals, which had remained subdued in recent months, have started catching up and became expensive by 9.06% and 4.62%, respectively on annual basis.
"The rising food inflation is a serious matter. However, we expect the rate of price rise to come down in near future when the fresh products flood the markets," Crisil Chief Economist DK Joshi said.
However, onions became 18.93% cheaper and prices of wheat and potatoes were also down 0.95% and 0.45%, respectively, year-on-year during the week under review.
Meanwhile, inflation in overall primary articles stood at 11.75% for the week ended October 15, compared to 11.18% in the previous week.
Inflation in non-food articles, including fibres, oil seeds and minerals, was recorded at 7.67% during the week ended October 15, as against 8.51% in the previous week.
Fuel and power inflation stood at 14.70% in the week under review, compared to 15.17% in the week ended October 8.
According to experts, the upsurge in food prices is likely to exert further pressure on the government and the Reserve Bank to tackle the situation expeditiously.
"With vegetable prices unlikely to ease until after the festive season, food inflation may remain elevated in the remaining weeks of October," ICRA economist Aditi Nayar said.
Headline inflation, which also factors in manufactured items, has been above the 9% mark since December 2010. It stood at 9.72% in September this year. RBI has already hiked interest rates 13 times to tame demand and curb inflation.
"Rate hikes did not seem to have the desired affect, as seen in the high headline inflation. Issues of supply constraint have to be addressed," Crisil's Joshi said.
In its second quarterly review of the monetary policy earlier this week, RBI had said that high inflation is likely to persist in the next couple of months before moderating as falling global commodity prices so far has been offset by rupee depreciation. It projected headline inflation to moderate to 7% by March 2012.
"Food inflation is likely to stay elevated due to demand--supply mismatches in non-cereals and large MSP revisions," RBI had said, adding that the real wage inflation has extended into first quarter of the fiscal.
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