Lower vegetable prices cool food inflation

After rising to a four-and-a-half-month high in the previous week, food inflation — aided by a steep dip in vegetable prices — fell by 0.86 percentage points to 9.04 per cent for the week ended August six, but the government expressed dissatisfaction with the latest figure.

Finance Minister Pranab Mukherjee wanted food inflation to fall “much steeper”. Their rate over nine per cent food “is not unacceptable”, he told reporters here.

In fact, details revealed the administration has reasons to worry. For, though vegetables prices nosedived to 2.59 per cent from as high as 14.61 per cent a week earlier, prices of fruits continued to rise — to 26.46 per cent from 16.49 per cent for the week ended July 30.

The contrast could be gauged, given that vegetable inflation was at about a one-month low, while inflation in fruits was the highest in over a month. Protein-based items like egg, meat, fish and milk also reported a drop in price rise. Inflation in egg, meat and fish was down at 9.93 per cent compared to 13.44 per cent in the earlier week, while milk saw inflation down to 9.76 per cent from 10.38 per cent last week.

The minister exuded confidence that the government policies and a good monsoon would help ease pressure on price front. “I do hope the measures taken to remove supply constraints in some of the agricultural commodities and good monsoon will help to have a further moderating influence on the prices of food and other essential commodities,” Mukherjee said.

Meanwhile, newly launched consumer price index for India rose 1.47 per cent in July at 110.3 points in July month-on-month. If taken against average prices in 2010, select food items, fuel and clothing turned expensive in July.