Food inflation plunges to 4-yr low of 1.81%

Food inflation fell sharply to a near four-year low of 1.81% for the week ended December 10 as prices of essential items like vegetables, onion, potato and wheat declined.

This is the lowest rate of food inflation since the week ended February 9, 2008, when it stood at 2.26%.

Food inflation, as measured by Wholesale Price Index (WPI), was 4.35% in the previous week. It had stood at 13.22% in the corresponding week of 2010.

According to the official data released today, onion became cheaper by 49.38% year-on-year during the week under review, while potato prices were down by 34.39%. Prices of wheat also fell by 4.21%.

Overall, vegetables became cheaper by 26.37%.

Experts feel the sharp fall in food inflation numbers, which was in double-digit till the first week of November, comes as a big relief to both the government and the Reserve Bank who have been battling high prices for over two years.

However, other food products grew more expensive on an annual basis, led by protein-based items.

Pulses became 14.22% costlier during the week under review, while milk grew dearer by 11.19% and eggs, meat and fish by 9.25%.

Fruits also became 8.89% more expensive on an annual basis, while cereal prices were up by 1.68%.

Inflation in the overall primary articles category stood at 3.78% during the week ended December 10, as against 5.48% in the previous week. Primary articles have over 20% weight in the wholesale price index.