After rising for a week,food inflation declined by over a percentage point to 10.35% during the week ended August 7,mainly due to decline in onion and potato prices. Food inflation stood at 11.4% for the previous week. Analysts expect that food inflation would continue to swing for another few weeks before showing declining trend after the arrival of new kharif crop.
With a good kharif crop expected and subsequent rabi crop owing to better soil condition,stocks of key vegetables such as onion and potato are being released in the market, PK Joshi,director of National Academy of Agricultural Research Management,affiliated to Indian Council for Agricultural Research (ICAR),told FE.
According to the government data,prices of vegetables declined by 22.12% while potato and onion prices declined by 49.81% and 6.91%,respectively,in the wholesale market on yearly basis.
FE had reported on Wednesday that with the comfortable stocks mainly attributed to bumper potato crop during 2009-10,the retail prices have been stable during the last few months. Traders had said that due to increase in storage facilities in two key production states UP and West Bengal the supplies in the market would be stable during next three months. The index for food articles group rose by 0.2% to 298.6 (provisional) from 298.1 (provisional) for the previous week due to higher prices of maize (2%),tea,rice,fish-marine and condiments & spices (1% each). However,prices of moong and masur (2% each) and urad and bajra (1% each) declined.