Food prices will soften in the coming weeks: C Rangarajan

The prime minister's economic panel today said food prices are expected to soften in the coming weeks, even as food inflation stood at 16.91 per cent for the week ended January 1.

"I expect some softening of food prices in the coming weeks, coming months," prime minister's Economic Advisory Council (PMEAC) chairman C Rangarajan said.

"There is normally seasonal decline in these month (November and December) but unfortunately that seasonal decline was not seen," he said.

Food inflation is an area of concern for the common man and government with rate of price rise touching as high as 18.32% in the last week of December mainly fueled by mass consumption items like vegetables, milk and protein-based items.

Food inflation has remained high for the entire month of December. The rising food prices will get reflected in the monthly inflation data for December, scheduled to be announced tomorrow. The headline inflation in November had come down to 7.48% from 8.58% a month ago.

Meanwhile, finance minister Pranab Mukherjee said the government will announce more steps to contain inflation later in the day.

"Last evening, it (steps to check inflation) was finalised. I think it will be issued today", he said answering questions on yesterday's meeting to check rising food prices.

"We have analysed the situation. We have indicated what further steps we are going to take. We have also indicated that there should not be any unnecessary panic," he said.

At the same time, rising inflation may put pressure on the Reserve Bank to hike key policy rates in the upcoming policy review scheduled on January 25.