Food inflation again in double digits

Food inflation, expected to be moderating now, again reversed gear after three weeks, entering into double digits at 10.05 per cent for the week ended March 12, as fruits and some vegetables turned expensive due to onset of summers.

Expensive fruits and potatoes during the week, and partially base effect of these commodities again pushed inflation above single digit.

The rise in food inflation, after three straight weeks of decline, may make it bit difficult to bring down overall inflation to 7.5 per cent by this financial year, as is expected by Finance Minister Pranab Mukherjee, but Reserve Bank of India’s (RBI’s) expectation of 8 per cent inflation could be possible, depending on a host of factors. Overall inflation had unexpectedly rose to 8.31 per cent in February from 8.23 per cent in January.

Onions prices rose by 10.80 per cent during the week from 6.55 per cent a week ago, but that is all because of base year effect. Otherwise, the prices declined over 7 per cent during the week.

Fruits turned expensive by 23.60 per cent against 19.39 per cent a week ago and potatoes by 2.82 per cent against the decline of 9.27 per cent.

Fuel and power inflation remain steady at 12.79 per cent with no changes during the week. However, non-food articles, particularly fibres showed a rising trend. Fibre prices rose by 89.55 per cent against 71.25 a week ago.