Food inflation down marginally at 9.42% in 1st week of March

Food inflation fell to a three-and-a-half-month low of 9.42% for the week ended March 5 as prices of potato and pulses declined.

The drop in inflation, which is still not in a comfort zone, is viewed as a breather for the government grappling with high price rise of essential commodities.

Food inflation in the previous week was 9.52%. After remaining in double digit for several weeks, food inflation came down to single digit in the last week of February.

This is the lowest rate of food price rise for the week ended November 27 last year when it was 8.69%.

The food inflation was 20.59% in the comparable period in 2010.

During the week under review, prices of potato went down by over 9% year-on-year, while that of pulses fell by 3.05%.

The government had earlier exuded confidence that the expected record crop of wheat and pulses will help stabilise the rise in prices of food items. Food inflation remained in the double digits for most of 2010.

However, for the week ended March 5, prices of other food items continued to rise.

Cereal prices went up by 3.88% year-on-year, while rice became dearer by 2.75%. Price of wheat also rose marginally by 0.69% on an annual basis.

While there has been drop in potato prices, vegetables on a whole became dearer by 8.71% on annual basis. Onion was expensive by 6.65%.

During the week under review, fruit prices rose by 19.39% year-on-year. Milk also became dearer by 7.16%.

Egg, meat and fish prices went up by 13.10% on an annual basis.

Meanwhile, prices of non-food articles went by 23.03% year-on-year. While fuel and power became dearer by 12.79%, petrol became costly by 23.14%.

The headline inflation in the country has remained above 8 per cent since February 2010. According to latest data, the overall inflation in February this year was 8.31%.

The RBI in its quarterly review today revised upwards the inflation forecast for March-end to 8% from 7% projected earlier.