Marginal fall in food prices

Food inflation eased a tad to 9.53 per cent during the week ended July 24 from 9.67 per cent in the previous week on account of a marginal fall in the prices of fruits, vegetables and sea fish to provide a modicum of relief to the ‘aam admi' as also the government which has had to explain to the people the reason for the runaway increase in prices. Apart from the slight softening in prices of certain commodities which has contained food inflation at single digit for the second week in a row, the high base effect was responsible for holding the WPI based food price line. Food inflation during the like week last year was at 14.58 per cent.

Even as food inflation is poised to ease further in the coming months following near normal monsoon precipitation and prospects of good kharif crops, analysts feel that a tapering in headline inflation is likely to take some more time. In June, overall inflation was at 10.55 per cent and it is not expected to soften significantly in July as manufactured products are turning more expensive. During the week, vegetable prices fell by 3 per cent, sea fish by 2 per cent and fruits by 2.34 per cent as compared to the previous week. According to NCAER chief statistician Rajesh Shukla, a better crop is expected following the monsoon and the supply side in the market is good. “Going forward, we can expect further fall in the food inflation,” he said.

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