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Food inflation rises to over 17 per cent
5 February 2011: Belying expectations of some respite from high prices, food inflation surged further to 17.05 per cent for the week ended 22 January 2011 from 15.57 per cent in the previous week as prices of vegetables, fruits, milk and protein-based items continued to surge.
The price rise is for real in that the high food inflation at over 17 per cent, as per the Wholesale Price Index (WPI) data, is over and above the 20.56 per cent surge witnessed during the like week a year ago.
Incidentally, even as the prices of vegetables, including onions, are expected to ease in the coming weeks on account of seasonal factors, prices of protein-based items such as milk, fish and eggs are likely to hold firm at higher levels. Perhaps, it was in view of this line of thinking, among other issues, that the Reserve Bank of India sought to revise its projection on headline inflation for the current fiscal to 7 per cent from 5.5 per cent estimated earlier.
Adding to the price spiral was inflation in the ‘Fuel and power' segment, which witnessed a 11.61 per cent year-on-year increase owing to the hike in petrol prices by Rs.2.50 a litre in January. What is worse, the ongoing political crisis in Egypt and other countries in the Middle East may further impact global crude oil prices which, in turn, will have a cascading effect on prices and overall inflation.
During the week, onion prices shot up by 130.41 per cent on a year-on-year basis while vegetables turned dearer by 77.05 per cent. Likewise, fruits were costlier by 15.47 per cent, egg, meat and fish by 15.05 per cent and milk by 11.41 per cent on an annual basis.
Source: Hindu