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Weekly food inflation dips to 9.32% for week ended October 1

13 Oct 2011 Evaluate

India’s weekly food inflation measured by Wholesale Price Index (WPI) eased marginally while non-food articles registered a sharp decline during the week ended October 1. The WPI based food inflation rose to 9.32% compared to 9.41% in the last week. This marginal fall in the food inflation is on the back of decline in prices of onion, pulses, vegetables and egg, meat and fish on a w-on-w basis, even though they remained higher on an annual basis.

According to the data released by the Ministry of Commerce and Industry, the index for `Food Articles` group rose by 0.9% to 199.5 (Provisional) from 197.7  (Provisional) for the previous week due to higher prices of fruits and vegetables (4%), moong, rice and ragi (2% each) and gram, tea and condiments and spices (1% each).  However, the prices of poultry chicken (9%), bajra (4%), maize (3%) and jowar and fish-inland (2% each) declined.

The index for `Non-Food Articles` group declined by 0.9% to 180.5 (Provisional) from 182.1 (Provisional) for the previous week due to lower prices of safflower (kardi seed) (17%), raw cotton (5%), castor seed (4%), soyabean (3%), raw jute and sunflower (2% each) and fodder and mesta (1% each).  However, the prices of gingelly seed (6%), raw silk (5%), flowers and gaur seed (4% each), linseed (2%), copra and groundnut seed (1% each) moved up.

As a result, the index for Primary Articles groups which account for 20.12% of the WPI, rose by 0.5% to 203.4 (Provisional) from 202.4 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 10.60% (Provisional) for the week ended October 1 as compared to 10.84% (Provisional) for the previous week.
 
Meanwhile, the index for Fuel and Power surged by 0.4% to 170.0 (Provisional) from 169.4 (Provisional) for the previous week due to higher prices of bitumen (4%), furnace oil, light diesel oil and aviation turbine fuel (2% each) and naphtha (1%). The annual rate of inflation, calculated on point to point basis, stood at 15.10% (Provisional) for the week ended October 1 as compared to 14.69% (Provisional) for the previous week.
 
Even after the marginal decline in the food inflation numbers compared to the last week, India’s weekly food inflation is still hovering close to two digit mark, which is something matter of concern for the government and to the RBI. Earlier the Reserve Bank of India (RBI) had indicated that it will change its monetary stance if inflation eased and further increase in its key policy rates demands on the price rise situation. 

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