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Thursday, June 24, 2010

India’s food inflation accelerates to 16.9 percent

India’s annual food inflation moved up faster to 16.9 percent for the week ended June 12 due to higher prices of essential items like pulses, fruits and vegetables, official data showed Thursday.The food inflation was at 16.12 percent during the previous week.

Data released by the commerce and industry ministry showed thesharp rise during the week under review was primarily due to higher prices of pulses like urad and moong, and fruits and vegetables.

The index for primary articles remained significantly higher at 17.6 percent as the sub-index for non-food items logged a relatively faster jump of 18.86 percent.

Following is the rise and fall in prices of some of the main commodities that form the sub-index for food articles over the past 52 weeks:

Cereals: 5.11 percent

Rice: 6.45 percent

Wheat: 4.21 percent

Pulses: 34.14 percent

Vegetables: 4.32 percent

Fruits: 13.55 percent

Milk: 21.12 percent

Potatoes: (-)36.99 percent

Onions: (-)22.42 percent

With the advent of the monsoon, policy makers are hoping that a depression in food prices will kick in soon, but the base effect of last fiscal might see inflation rise over a few more weeks before it eventually falls.

Though pressure is building on the Reserve Bank of India to intervene, the country’s central bank has managed to hold off another policy rate revision to bring the situation under control.

RBI governor D. Subbarao had said last week inflation was getting more broad-based, but the bank would continue to rely on its promise of a caliberated exit from a more relaxed monetary policy stance.Finance Minister Pranab Mukherjee said in Washington Tuesday the RBI is prepared to act “as and when considered necessary.”

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