Monday, November 29, 1999

Food inflation at 16.12% on cheaper vegetables

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Providing a breather to consumers, India's food inflation came down marginally to 16.12% for the week ended June 5 from 16.74% reported a week before. According to data released on Thursday by the commerce and industry ministry, inflation declined by 0.62% in the week, primarily because the prices of fruit and vegetables came down during the period.However, analysts say a further decline in food inflation would entirely depend on the progress of the monsoon, which has slowed down during the last few days after hitting the Kerala coast in late May.The decline in food inflation may also ease the pressure on RBI to take immediate policy measures to tame rising prices.Prices of fruit and vegetables fell by 6% and tea became cheaper by 2% during the week, according to data. The prices of fruit declined by 14%. However, prices of urad rose 6% and those of maize, bajra and gram inched up by 1% each.Compared to last year, the prices of potatoes declined by 35% and that of onions by 17.80%. Pulses, however, became costlier by 34% and milk by 21%.Finance minister Pranab Mukherjee had recently expressed hope that food prices would decline by mid-July, keeping in mind a good monsoon.An FE analysis of retail prices of major food commodities in 11 major cities across the country earlier this week, showed barring a marginal increase in the retail price of wheat in Lucknow, prices of most other commodities which FE had tracked, either remained stable or dropped slightly.Sugar prices continued their slide and fell by almost 5.08% in Bangalore and by 3.1% each in Mumbai and Delhi during the week ended June 14. Among foodgrain, the price of rice dropped by 5% in Mumbai retail markets, while wheat rose by 8.3% in Lucknow, the data culled from department of consumer affairs showed.

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