Food inflation up at 8.55%

Food inflation rose by 1.08 percentage points to 8.55 per cent during the week ended May 14, defying those who say that food prices are not a worry now and attention should be paid to manufactured product prices.

Inflation in the previous week stood at 7.47 per cent and in the corresponding week of last year at 21.55 per cent. Part of the explanation for the rise in inflation could be what is called base effect since inflation last year at this point of time had come down from 22.15 per cent in the previous week.

Though many economists say that food inflation is now on a moderating trend in the long run, certain segments of food inflation are really showing upward or high movements. Like, fruits inflation stood at over 30 per cent for the fourth week in a row. It rose to 32.37 per cent for the week under review.

Egg, meat and fish inflation also rose to 8.26 per cent from 5.67 per cent a week earlier.

Dhanlaxmi Bank Head, Policy & Research Rajrishi Singhal said, “Food inflation is once again showing some signs of an upsurge. Food inflation has risen on higher prices of coarse cereals, fruits, mutton, fish and chicken.”

Though fuel and power inflation remained intact at 12.11 per cent, it is because petrol prices have not been factored into. Petrol price rise by Rs 5 a litre came into effect from May 15 and will be accounted for in the next week’s data.

The government is also considering increase in prices of diesel, LPG cylinder and kerosene next month and that could further fuel inflation.