Food inflation drops to 16.81%

Food price inflation continued to soften in the week ended January 9 even as non-food prices witnessed a sudden spurt, data released by the Government showed. Despite the drop in food inflation from nearly 20% a few weeks earlier, the RBI will most likely boost the CRR if not the policy rates. For the week ended January 9, inflation for the Food Articles group fell to 16.81% from 17.28% in the preceding week, according to the Union Commerce & Industry Ministry. The index for Food Articles group declined by 0.1% to 285.6 from 285.8 for the previous week.

Inflation for the Non-Food Articles group jumped to 10.40% from 8.76% in the week ended January 2. The index for Non-Food Articles group rose by 1.9% to 257.9 from 253.2 for the previous week. Inflation for the Minerals group remained unchanged at (-) 5.18%. The WPI for the Primary Articles group rose by 0.4% to 284.6 from 283.4 in the previous week. The annual rate of inflation for the group stood at 13.93% compared to 13.82% for the previous week. It was at 11.87% during the corresponding week of the previous year.

The annual rate of inflation for the Fuel & Power group stood at 6.34% for the week ended January 9 compared to 6.25% in the previous week. It was (-) 1.41% during the week ended January 10, 2009. The index for this major group rose by 0.1% to 350.4 from 350.1 for the previous week. Inflation for the Mineral Oils group rose to 9.78% from 9.65% while that for the Electricity group stood unchanged at 1.95%.

India’s benchmark wholesale price inflation rate accelerated to 7.31% in December, the most in 13 months. That exceeded the central bank’s forecast of inflation
touching 6.5% by March 31, 2010.