Food inflation plunges below 1%...Fuel inflation too dips

Food inflation in India plunged in the third week of December, falling under the 1% mark, data released by the Government showed on Thursday. Fuel inflation too dropped. The sharp drop in food inflation over the past few weeks is likely to provide some much-needed breather to consumers and the policymakers alike. However, it will be a while before the RBI starts considering a cut in its policy rates. For that to happen, the headline WPI print should also fall sharply. Food inflation declined to 0.42% in the week ended December 17 from 1.81% in the preceding week, the Commerce & Industry Ministry said today. Food inflation stood at 15.48% in the corresponding week last year. Inflation in the Primary Articles group fell to 2.70% in the week under review, from 3.78% in the week ended December 10, according to the Commerce Ministry statement. It was at 18.85% in the year-ago period. Inflation in the Fuel & Power group stood at 14.37% in the week ended December 11, from 15.24% in the previous week, the Government data showed. It was at 11.85% in the comparable week of the previous year. Inflation in the Non-Food Articles space slid to 0.28% in the week under review from 1.37% in the previous week, the Government data showed. It was at 26.05% in the same period a year earlier.



Inflation in the Minerals group stood at 23% in the week ended December 17 versus 21.35% in the week ended December 10, according to the Commerce Ministry data. Inflation in this group stood at 30.58% in the year-ago period. On an annual basis, onions turned cheaper by ~59% in the week under consideration, and vegetable prices dropped ~36% on an annual basis. Fruits turned costlier by ~8.5% year over year, while Milk prices increased ~11.3% and Egg, Meat & Fish became pricey by ~11.5% compared to the year-ago period. Potato prices were down ~33.7% on an annual basis while Cereal prices went up by ~2% year over year. Prices of Pulses jumped by ~14%. Annual inflation in Rice stood at ~1.8% while Wheat prices fell ~3.3%. In the Non-Food category, prices of Fibres fell by ~8.7% year-on-year while that of Oilseeds rose by ~9.5% from a year ago. In Fuel category, LPG prices are up ~14.3%, petrol by ~17.1% and diesel by ~9.2%. Compared to the previous week, prices of Onion, Potato and Vegetables were down 9.5%, 10.5% and ~7.7%, respectively.