Food inflation rises to 16.5 pc

Higher prices of pulses,milk and fruits have pushed food inflation to 16.55 per cent for the week ended May 22 from 16.23 per cent in the previous week. During the week,prices of potatoes and onions rose by 34.09 per cent and 11.55 per cent respectively. The fuel price index too climbed 14.14 per cent,as opposed to an annual rise of 12.08 per cent in the previous week due to higher prices of electricity.

Food prices continue to hover in the double digits at around 17 per cent,moderating a little after hitting a peak of 20 per cent in December. Prices of pulses shot up by 30.84 per cent,milk by 21.12 per cent,fruits 13.7 per cent and vegetables 1.34 per cent. Among other food items,rice and wheat turned costlier by 7.30 per cent and 3.07 per cent respectively. Although food prices have been firming up,experts feel prices will come down in the next 2-3 months. Seasonal pressure on certain food products is expected to ease in early July… from August and September we will see a continuous downtrend in food inflation, said HDFC chief economist Abheek Barua.

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However,rise in domestic fuel prices runs the risk of offsetting any relief on food prices. A ministerial panel is meeting on June 7 to consider increasing state-set petrol and diesel prices as

India looks to move towards a market determined price regime.