Food inflation surges to 12.21%

Food inflation rose to 12.21 per cent during the week ended October 22, with expensive vegetables, pulses, fruits and milk, putting more burden on the common man.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 11.43 per cent in the previous week. The rate of price rise of food items stood at 13.55 per cent in the corresponding week of the previous year.

As per data released by the government today, vegetables became 28.89 per cent costlier on a year-on-year basis. Pulses grew costlier by 11.65 per cent, fruits by 11.63 per cent and milk by 11.73 per cent.

Eggs, meat and fish also became 13.36 per cent more expensive on an annual basis, while cereal prices were up 4.13 per cent.

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However, onions became 20.33 cheaper. Wheat prices were also down 1.54 per cent year-on-year during the week under review.

Commenting on the latest food inflation numbers, Finance Minister Pranab Mukherjee said the rise in rate of price rise was a matter of "grave concern", but attributed this to the festive season, which led to an increase in demand.

"Inflation is still a matter of grave concern. This is also the affect of the festive season. November onward, the real trend for the remaining four months of the fiscal will be available," he told reporters.

On a weekly basis, inflation in the overall primary articles category stood at 12.08 per cent, compared to 11.75 per cent in the previous week. Primary articles have over 20 per cent weight in the wholesale price index.

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Inflation in non-food articles, including fibres, oil seeds and minerals, was recorded at 6.43 per cent during the week under review, as against 7.67 per cent in the week ended October 15.

Fuel and power inflation stood at 14.50 per cent during the week ended October 22, compared to 14.70 per cent in the previous week.

The upsurge in food prices is likely to exert further pressure on the government and the Reserve Bank to tackle the situation expeditiously.

Headline inflation, which also factors in manufactured items, has been above the 9 per cent-mark since December, 2010. It stood at 9.72 per cent in September this year.

The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation.

In its second quarterly review of the monetary policy last month, the apex bank said it expects inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7 per cent by March, 2012.