Vegetable prices push Oct retail inflation to double-digit zone

CPI-based inflation at 10.09%; rising onion and tomato prices add to pressure

Rising vegetable prices catapulted the Consumer Price Index (CPI)-based inflation to double digits in October, after a gap of six months, even as normal monsoon is expected to yield a bumper crop this financial year.

Retail inflation rose to 10.09 per cent in the month from 9.84 per cent in September as the rate of price rise in vegetables  surged to 45.67 per cent against 34.93 per cent over the period, showed official data released on Tuesday.

Both urban and rural areas witnessed double-digit inflation at 10.20 per cent and 10.11 per cent, respectively, in October.

Overall food and beverages inflation soared to 12.56 per cent against 11.44 per cent in September.

With food items having a weight of more than 45 per cent in the CPI, this inflation surges whenever food prices rise. On the other hand, food items have 24 per cent weight in the Wholesale Price Index (WPI) because of which the WPI inflation stood at just 6.46 per cent in September. WPI inflation for October is slated to come later this week.

“The link between good agriculture production and low food prices have been broken from 2009-10. You require efficient logistics to supply these items as well,” State Bank of India Chief Economic Adviser Soumya Kanti Ghosh told Business Standard.

Besides, local problems in onion and tomatoes also added to the food inflation pressure, he said. Cyclone Phailin had affected paddy crop last month. Cereal inflation remained elevated, despite some moderation at 12.01 per cent in October from 12.77 per cent in September.