Inflation drops to 0.48% despite costly food items
Even though food items became dearer because of the base effect, wholesale price index measured annual inflation for the week ended May 23 dropped to 0.48%.
By ET Bureau |
NEW DELHI: Even though food items became dearer because of the base effect, the wholesale price index (WPI) measured annual inflation for the week ended May 23 dropped to 0.48%.
Fruits, vegetables, pulses and cereals became costlier over the week, while fuel index and index for manufactured items remained unchanged. But agri-analysts suggest with normal monsoon in offing, inflation in food items is likely to remain soft.
According to Ashok Gulati, director in Asia for International Food Policy Research Institute, inflation cues for food items are benign. "The advance of monsoon might have been stalled for some time. But considering that the onset of monsoon was a week before this will not make much difference to expectations of a good kharif crop," he said.
Monsoon rains are key to the cultivation of kharif crops, which account for nearly 60% of the annual agricultural output. Sowing of kharif crops will start in second week of June. Farmers income will not be hurt as lower price could be well cushioned by higher output.
"Land preparation and sowing activities will be on time due to normal monsoon. Some parts of south India, especially Kerala, Karnataka and Tamil Nadu, have reportedly commenced sowing activities for oilseeds like groundnut and sunflower, paddy, maize etc," said Karvy Comtrade chief analyst Harish Galipelli.
Fruits, vegetables, pulses and cereals became costlier over the week, while fuel index and index for manufactured items remained unchanged. But agri-analysts suggest with normal monsoon in offing, inflation in food items is likely to remain soft.
According to Ashok Gulati, director in Asia for International Food Policy Research Institute, inflation cues for food items are benign. "The advance of monsoon might have been stalled for some time. But considering that the onset of monsoon was a week before this will not make much difference to expectations of a good kharif crop," he said.
Monsoon rains are key to the cultivation of kharif crops, which account for nearly 60% of the annual agricultural output. Sowing of kharif crops will start in second week of June. Farmers income will not be hurt as lower price could be well cushioned by higher output.
"Land preparation and sowing activities will be on time due to normal monsoon. Some parts of south India, especially Kerala, Karnataka and Tamil Nadu, have reportedly commenced sowing activities for oilseeds like groundnut and sunflower, paddy, maize etc," said Karvy Comtrade chief analyst Harish Galipelli.
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