Food inflation at four-month low of 16.22 pc

NEW DELHI: Food inflation fell to its lowest in four months at 16.22% for the week ended March 13, as the pace of price rise for potatoes slowed and other vegetables such as onions became cheaper.

The 0.08 percentage points fall in food prices from the previous week, however, is unlikely to prevent the overall inflation from vaulting to double digits in March from 9.89% in February as high food and fuel prices have started spilling over to non-food items.

During the week, petrol prices rose 16.82%, while diesel turned costlier by 14.99% year-on-year, as the government restored customs on crude and raised excise duty on petrol and diesel.

“Food inflation is likely to soften in the coming months, but fuel and manufacturing inflation could pick up. I expect overall inflation to be around 11% in March,” HDFC Bank economist Jyotinder Kaur said.

The government expects food inflation to fall after the arrival of the rabi (winter) crop in the markets next month.
Finance minister Pranab Mukherjee too has said that food inflation may spread to non-food items over a period, although food prices have started coming down.

During the week, potatoe prices rose by just 5.62% on yearly basis, while onion prices declined 6.64%. As there is an over supply of potatoes in some markets like West Bengal, prices are likely to fall further in the days ahead, analysts said. Prices of fruit showed a rise of 11.06% year-on-year, that of rice 7.42%, pulses 31.68% and milk 15.31%.

On weekly basis, moong and pork turned costlier by 5% each, urad by 4%, coffee by 2% and fruit and vegetables by 1% each. However, masur prices declined 4% while eggs, bajra, condiments and spices and maize by 1% each.