Food inflation Rises to 9.41 percent; Pranab Concerned
Friday, October 7, 2011
New Delhi: Finance minister Pranab Mukherjee on Friday expressed concern over costlier vegetables, fruits and milk pushing up food inflation to 9.41 percent for the week ended September 24, and said he has been in constant touch with the RBI on how to rein in the rate of price rise. Food inflation,as measured by Wholesale Price Index (WPI), stood at 9.13 percent in the previous week. It was 16.88 percent in the corresponding week of 2010. "Inflation is definitely a matter of concern. We shall have to see how to bring it down to moderate level," Mukherjee told reporters in New Delhi. "I am constantly in touch with the Reserve Bank of India (RBI)," he added. As per data from the ministry of commerce, vegetables became dearer by 14.88 percent year-on-year during the week under review, while potatoes and onions became more expensive by 9.34 percent and 10.58 percent, respectively. Fruit prices went up by 11.72 percent, milk by 10.35 percent and eggs, meat and fish by 10.33 percent. Cereals became dearer by 4.57 percent and pulses were up 7.54 percent on an annual basis during the seven-day period. Headline inflation, which factors in manufactured items, fuel and non-food primary items, in addition to food commodities, stood at a 13-month high of 9.78 percent in August. The Reserve Bank has already hiked policy rates 12 times since March, 2010, to tame demand and curb inflation. The monsoon was normal this year and the government had earlier exuded hope this would bring down food prices. Overall, inflation in primary articles stood at 10.84% during the week under review, compared to 11.43% in the previous week. Inflation in non-food articles, which comprise fibres, oil seeds and minerals, stood at 10.77% for the week ended September 24, as against 12.89 percent in the previous week. Fuel and power inflation remained flat at 14.69 percent, the same as in the previous week. "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 Chief Economist D K Joshi said. He said the government should address issues related to storage and cold chain facilities to reduce supply constraints. Joshi said the pressure on RBI continues to remain. "We are definitely moving toward the end of rate hike cycle. However, there might be one last round of increase in interest rates later this month, as headline inflation remains stubbornly high," he said.
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