Despite reports of increasing prices of some items, food inflation declined to 7.78 per cent for the week ended June 18, while it stood at 9.13 per cent during the previous week.

However, food inflation, as measured by the Wholesale Price Index (WPI), was over 20 per cent during the comparable period of June, 2010, setting a high base for the rate of inflation.

The latest government data released on Thursday said prices of vegetables, pulses and onions declined in the week ended June 18, while that of other food items saw an increase.

Vegetables were over 10 per cent cheaper year-on-year, while prices of pulses went down by 9.50 per cent and that of potato by 2.39 per cent on an annual basis.

Significantly, the hike in prices of diesel and kerosene announced last week will be reflected in the weeks to come that could fuel inflation.

Headline inflation stood at 9.06 per cent in May. Inflation in overall primary articles stood at 11.84 per cent, down from 12.62 per cent in the previous week.

Primary articles have a share of over 20 per cent in the WPI basket.

Meanwhile, inflation of non-food primary items stood at 17.91 per cent during the week ended June 18, down from 18.43 per cent in the previous week.

Commenting on the latest food inflation figure, Crisil Chief Economist D. K. Joshi said: “The high base is the major reason for the moderation in food inflation.”

Keywords: Food inflation

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