Food inflation likely to be range-bound this month

Food inflation, based on WPI, had risen to 18.2% in Aug pushing up the general inflation to 6.1%

Food inflation is expected to be "range-bound" this month as good monsoon has helped ease prices of certain items, a top government official said today.

Food inflation, based on the Wholesale Price Index, had risen to 18.18% in August pushing up the general inflation to 6.1%.

"There is some softening in food prices this month. I do not have solid figures to say how much the food inflation will be. Looking at the price trend, it will be range-bound," Consumer Affairs Secretary Pankaj Agrawal told PTI.

Agrawal, who heads the department that monitors wholesale and retail prices of 22 food items, said the rise in food prices so far has not be as bad as it was in the last month because good rains have brought down price pressure on some food articles barring onions.

That apart, edible oils and pulses have not shown great spike in prices in last three weeks. Vegetable prices, which had gone up because of rains, have started softening, he said.

Except for onions, Agrawal said that prices of potato, tomato and other vegetables have started cooling down. Retail price of onion continue to rule high at Rs 66 per kg in Delhi

About cereals, the official said that the Department is examining the reasons behind the price increase in cereals like rice and wheat.

"On month-to-month basis, the contribution of wheat and rice to the overall food inflation has been high as compared to onion and other food items. So, we are looking into this issue," he said.

Southwest monsoon arrived early and 53% of the country received normal rains, boosting summer crop planting and raising the government's hope that inflation would ease.