Food inflation eases to 17-mth low of 10.15%

Food inflation declined to a 17-month low of 10.15 per cent for the week ended November 13, as vegetable prices softened on fresh crop arrival, raising hopes that the Reserve Bank of India (RBI) would not raise key rates for now.

This is the sixth week in a row that food inflation has declined on the back of improved crop arrivals in markets across the country, as also the impact of RBI’s monetary tightening which arrested pressure on demand.

It is also the first time after a long gap that food inflation has declined for such a long period. Food inflation stood at 10.30 per cent in the previous week. On an annual basis, prices of pulses fell by 7.58 per cent, and vegetables became cheaper by 3.76 per cent on account of a sharp dip in potato prices (48.70 per cent).

“Decline in prices for food articles is attributable to the increased supply of agricultural commodities in the market,” Deloitte India Principal Economist Shanto Ghosh said.

In fact, the large base last year was another factor that made food inflation for the week ended November 13 seem lower.