Bad news! Food inflation zooms to 10.60%

Food inflation is back in double digits after a gap of a month-and-a-half and stood at 10.60 per cent for the week ending October 8 on the back of costlier vegetables, fruits, milk and protein-based items.

Food inflation, as measured by Wholesale Price Index (WPI), stood at 9.32 per cent in the previous week. The rate of price rise of food items stood at 15.72 per cent in the corresponding week of 2010.

...

As per data released by the government on Thursday, vegetables became 17.59 per cent more expensive year-on-year during the week ended October 8.

Fruits grew dearer by 12.39 per cent, milk by 10.80 per cent and eggs, meat and fish by 14.10 per cent on an annual basis.

Pulses also became dearer by 7.42 per cent and cereal prices were up 4.73 per cent year-on-year.

However, onions became 11.27 cheaper and wheat prices were down 0.18 per cent during the week under review.

...

Food inflation had previously crossed the double-digit mark in the week ended August 20.

Inflation in overall primary articles stood at 11.18 per cent for the week ended October 8, compared to 10.60 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI.

Inflation in non-food articles, including fibres, oil seeds and minerals, was recorded at 8.51 per cent during the week under review, as against 9.59 per cent in the week ended October 1.

...

Fuel and power inflation stood at 15.17 per cent in the week under review, compared to 15.10 per cent in the previous week.

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

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

...

The RBI has already hiked interest rates 12 times, by a total of 350 basis points, since March, 2010, to tame demand and curb inflation.

The apex bank is scheduled to announce its second quarterly review of the monetary policy on October 25 and experts have said that another rate hike is expected, despite the slowdown in industrial growth.

On Wednesday, Finance Minister Pranab Mukherjee blamed high global commodity prices and supply constraints for stubbornly high inflation.

He, however, exuded confidence that inflation will moderate to around 7 per cent by March, 2012.