Food inflation declined by a whopping 3.98 percentage points to 12.92 percent for the third week of June, as the rate of price rise in cereals and vegetables showed a remarkable drop due to high base effect. However, a number of essential items like pulses, fruits and milk remained quite expensive for the week ended June 19. The fall in food inflation would provide some breather to the government struggling hard to control prices of essential items which may again rise due to the cascading effect of the diesel price hike last week. The fall in food inflation was largely because of high base effect, which means that inflation was so high at this point of time last year that the rate of price rise now looks comparatively lower. Because of the high base effect, cereal inflation came down to 5.36 percent against 13.42 percent a year ago, vegetables fell 1.17 percent against 25.19 percent. Within vegetables, potatoes turned cheaper by 39.61 percent, while onion prices fell by 7.36 percent. Among cereals, rice inflation was 6.44 percent against 17.22 percent a year ago, and wheat stood at 4.49 percent against 6.40 percent.
News On AIR | July 1, 2010 9:03 PM
Food inflation falls sharply by about four percent