Food inflation eases, but still above 16 per cent

New Delhi, May 28 (PTI) Food inflation in India eased
marginally to 16.23 per cent as of May 15 on cheaper food
grains, but held out above the 16 per cent mark for the fifth
straight week due to costlier fruits and vegetables.
In the week ended May 8, food inflation was 16.49 per
cent and has been hovering this level since the start of the
year. It had shot past 20 per cent in December last year.
While food grain prices eased with arrival of rabi
(winter) crops in the market, economists said they expect a
substantial fall only after September when the monsoon plays
out.
Monsoon, which accounts for over 80 per cent of rains in
India, is expected to hit the Indian coast in early June. The
India Meteorological Department expects monsoon to be 98 per
cent normal this year, after a poor showing last year that hit
crop output and fueled rise in food prices.
"Food inflation will remain at this level for some time.
Unless monsoon scenario becomes clear, nothing can be said.
However, we can expect a substantial decline in food prices in
the second half," Crisil's chief economist D K Joshi said.
Planning Commission member Abhijit Sen recently said the
food inflation will come down to 4 to 5 per cent by November.
Prime Minister Manmohan Singh too during the week said that
overall inflation would be brought down to 5-6 per cent level
by December.
Wholesale prices-based inflation shot above 10 per cent
in February, although they are provisionally lower at 9.59 per
cent in April.
"Prices of foodgrains have definitely come down with the
arrival of rabi crop and government buffer stocks. What has
not eased is the price of fruits and vegetables due to heat
wave conditions," said an economist who did not wish to be
named.
Foodgrain prices, which was up 21.15 per cent at the
start of the year, cooled to 9.77 per cent in the first week
of May. However, inflation in fruits and vegetables have not
changed much. It was 9.20 per cent in the first week of
January and was 8.82 per cent in the first week of May.
Over the week ending May 15, non-food articles also saw a
decline in prices. Cotton seed prices fell 2 per cent and raw
rubber and mustard seed by 1 per cent each. However, prices of
tea rose by 9 per cent, that of mutton by 5 per cent, and urad
and spices by 1 per cent each. PTI JD
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