India's food inflation eases further

India's food prices inched lower in the middle of May while prices of non-food articles as well as that of fuel items also declined, data released by the Government showed. Inflation in the Food Articles group fell to 16.23% in the week ended May 15 as against 16.49% in the previous week, the Commerce & Industry Ministry said today. It stood at 8.79% in the corresponding period last year. The WPI for the Food group dropped 0.1% to 293.6. Inflation in the Primary Articles group softened to 15.90% in the week under review compared with the previous week's annual reading of 16.19%. Inflation in the group stood at 6.97% during the week ended May 16, 2009. The WPI for this group declined by 0.1% to 298.9.

Non-food Articles' inflation fell to 18.25% in the week ended May 15 from 18.68% in the preceding week. Inflation in this group stood at 3.16% in the year-ago period. The WPI for this group declined by 0.1% to 281.8. India's Fuel price inflation fell to 12.08% in the week under review compared to 12.33% in the week ended May 8. It was at -6.08% during the corresponding week of the previous year. The WPI for this group rose by 0.05% to 365.5.

Wholesale prices eased in line with expectations to 9.59% in April from a year earlier, stoking speculation that the Reserve Bank of India (RBI) would not increase interest rates too aggressively amid concerns about the state of some of the advanced economies. Food inflation would fall sharply to 4-5% by November from the current level of more than 16%, Planning Commission member Abhijit Sen said on Wednesday. Sen also noted that agriculture growth would be revised upwards to 0.2% in FY10 from the previous estimate of 0.2% contraction. Earlier this week, Prime Minister Dr. Manmohan Singh also hoped that inflation would come down to 5% to 6% by December.