Halting the two-week declining trend, food inflation inched up yet again, though marginally, to 11.49 per cent for the week ended February 12 from 11.05 per cent in the previous week owing to the continuing surge in the prices of vegetables, milk and protein-based items such as eggs, meat and fish.
The U-turn in WPI (wholesale price index) food inflation data, coming as it does just a few days ahead of the Budget on February 28, is an additional cause for concern even as Prime Minister Manmohan Singh expressed confidence in the Lok Sabha that the steps taken by the government would lead to a moderation in prices and overall inflation would eventually decline to 7 per cent by the end of March. Conceding that high food prices has been a matter of concern, Dr. Singh said: “I will be the first one to admit that inflation in the last 18 months has become a problem. There were reasons beyond our control. First of all, there was the drought of 2009 and there were natural calamities which affected the production of important products such as vegetables and onions.”
Planning Commission Deputy Chairman Montek Singh Ahluwalia also maintained that food inflation would ease to single digit by the end of the current fiscal while noting that the country had sufficient stocks of cereals to stem the inch-up in prices. The WPI data revealed that prices of cereals had increased a tad during the week ended February 12 with inflation in cereals at 2.07 per cent and rice at 1.65 per cent on a year-on-year basis. Alongside, however, prices of other edibles continued to soar, with eggs, meat and fish turning dearer by 14.79 per cent and milk costlier by 16.99 per cent.
During the week, prices of vegetables surged by 15.89 per cent although potatoes were cheaper by 9.72 per cent. Milk prices also went up by five per cent while mutton turned two per cent dearer.
As for fuel items, prices of furnace oil and naphtha rose by two per cent each. Global markets are anticipating a further rise owing to the ongoing political crisis in various countries in West Asia and North Africa. Already crude oil prices have touched a two-year high of $99.10 a barrel at the New York Mercantile Exchange while Brent crude has soared to $120 a barrel.