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Food inflation rises to 16.74 per cent
10 June 2010: Food inflation rose for the second consecutive week, pushed by higher prices of fruits, pulses and milk to 16.74 per cent, prompting speculation that the Reserve Bank may tighten money supply at its policy meet in July 2010.
Food prices increased by 0.19 percentage point for the week ended on 29 May 2010 from 16.55 per cent in the previous week. Prices of pulses shot up by 31 per cent, that of milk by 21.1 per cent and fruits by 18.7 per cent.
Consumer staples, such as rice and wheat, turned costlier by 7 per cent and 3 per cent respectively. However, prices of potatoes and onions eased by 30.87 per cent and 12.27 per cent respectively.
The RBI, according to analysts, may take steps to control money supply in a bid to cool inflation, which has remained at an elevated level despite moderation from 20 per cent in December.
The central bank is scheduled to announce its first quarter review of monetary policy on 27 July 2010.
Source: DNA