Food inflation surged yet again to 9.41 per cent for the week ended September 24 from 9.13 per cent in the previous week as prices of almost all edibles continued to soar on an annual basis despite a good monsoon this year.
As per the WPI (Wholesale Price Index) data released here on Friday, vegetables turned 14.88 per cent dearer on a year-on-year basis, mainly driven by higher prices of potatoes and onions which went up by 9.34 per cent and 10.58 per cent, respectively.
Alongside, fruits were costlier by 11.72 per cent, milk by 10.35 per cent and prices of eggs, meat and fish rose by 10.33 per cent. Even staples such as cereals and pulses, which had witnessed a decline in prices in recent times, also turned dearer by 4.57 per cent and 7.54 per cent, respectively, on a year-on-year basis during the week.
Commenting on the relentless rise in food prices with no signs of its cooling down, Finance Minister Pranab Mukherjee said: “Inflation is definitely a matter of concern. We shall have to see how to bring it down to [a] moderate level…I am constantly in touch with the Reserve Bank of India (RBI).”
An additional worry is that headline inflation, which includes manufactured items, fuel and non-food primary articles in addition to food commodities, also stands stubbornly high at 9.78 per cent in August. The apex bank, on its part, has already raised its key policies rates a dozen times since March, 2010, in its effort to shrink demand by making funds costlier and thereby rein in inflation. However, the net result has not been in keeping with expectations.
With a reasonable good monsoon this year, the authorities, as also economic analysts, were expecting a cool-down in food prices and a consequent slide in headline inflation. A decline in both counts has been elusive and the only consolation is that food inflation during the like week in September, 2010, was at a high of 16.88 per cent.
“Given the good monsoon, we were expecting some moderation in the rate of price rise. But it seems not to be happening and there is particular pressure on vegetables and fruits,” Crisil's chief economist D. K. Joshi said. He felt that the government needed to improve the storage and cold chain facilities to help ease supply constraints.
According to the WPI data, overall inflation in primary articles stood at 10.84 per cent during the week ended September 24 as compared to 11.43 per cent in the previous week. Inflation in non-food articles, including fibres, oil seeds and minerals, stood lower at 10.77 per cent for the week as compared to 12.89 per cent while inflation in fuel and power inflation remained unchanged at 14.69 per cent.
