Much to the respite to the common man as well as the government, which has been facing Opposition flak on rising prices, food inflation fell sharply to over a three-year low at 6.60 per cent for the week ended November 26 from 8 per cent in the previous week, following a significant moderation in prices of essentials such as onions, potatoes and wheat.
As per the WPI (Wholesale Price Index) data released here on Thursday, food inflation at this level is at its lowest since August 9, 2008, when it pegged at 6.19 per cent to afford some relief in spending on edibles even as the moderation in the food price spiral appears sharp, partly owing to the effect of a higher base. Food inflation during the like week in the previous year was higher at close to 9 per cent.
However, even as there are apprehensions in certain quarters over what steps the Reserve Bank of India chooses to take during its monetary policy review on December 16 to tame overall inflation despite the slowdown in growth, the timely easing of food inflation is likely to provide some comfort to the apex bank. The official data revealed that while onions turned cheaper by 39.20 per cent, prices of potatoes and wheat also declined by 15.75 per cent and 4.70 per cent, respectively, on a year-on-year basis. For a change, prices of vegetables as a whole also eased by 1.25 per cent to provide some relief from double-digit inflation in kitchen greens in the past few months.
The bad news, however, is that prices of protein-rich items such as pulses, eggs, meat and fish has continued to soar during the week on an annual basis. As per the WPI data, pulses turned dearer by 13 per cent and milk by 11.02 per cent while prices of eggs, meat and fish went up by 10.04 per cent. Keeping pace, fruits also were costlier by 10.72 per cent, as were cereals by 1.68 per cent.
According to Crisil's chief economist D. K. Joshi, while food inflation is expected to moderate in the months ahead following a good farm output, the high inflation in protein-rich items is owing to structural factors. In the overall primary articles category, inflation stood at 6.92 per cent during the November 26 week as against 7.74 per cent in the previous week.