Food inflation eases, headline index expected to rise

With falling food prices, inflation in primary articles has declined to 14.16 per cent from 15.08 per cent. After the Budget duty raises, this is the first week for which data have been released by the government.

Fall in the prices of some of the essential food items pulled down the Wholesale Price Index for food articles to 16.30 per cent for the week ended March 6, compared to 17.81 per cent in the previous week. The food index also brought down the overall inflation for primary articles to 14.16 per cent, as against 15.08 per cent in the previous week even as the fuel index showed an upward movement because of increase in excise duty.

The fuel index rose to 12.68 per cent from 11.38 per cent for the previous week ending February 26. The prices of jet fuel, light diesel, bitumen and furnace oil were increased following increase in imported parity cost that includes a higher Customs duty. The Budget had also increased the Cenvat rate by two per cent.

Food prices fell for the second week straight. Prices of fish, vegetables, wheat, pulses, fruit and tea, among others, declined during the week. The prices of pulses fell by six per cent, fruit and vegetables by four per cent, eggs two per cent and fish by one per cent.

According to experts, even as food inflation is expected to fall in the coming financial year, the fall is not going to be drastic, due to higher prices of food items internationally.