Food inflation inches up to 8.04% for week ended July 23

After dropping to a 20-month low in mid-July , food inflation inched up to 8.04 per cent for the week ended July 23 on expensive onion, fruits and milk. Food inflation, measured by the Wholesale Price Index (WPI), was 7.33 per cent in the previous week, the lowest since November 2009.

The rate of price rise of food items was 16.27 per cent in the corresponding week of July 2010.

According to the official data released on Thursday, onion became dearer by 26.36 per cent year-on-year and fruits were expensive by 15.97 per cent during the week under review.

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Milk prices went up by 10.26 per cent, while vegetables were expensive by 10.20 per cent on an annual basis. Besides, cereal prices were up by 5.13 per cent, potato by 7.85 per cent, and egg, meat and fish by 6.66 per cent.

However, pulses became cheaper by over 7 per cent on an annual basis.

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The latest numbers also mark a resurgence of food inflation after a two-week long declining trend when the rate of price rise had fallen below the 8 per cent mark.

Overall, primary articles recorded inflation of 10.99 per cent for the week ended July 23, up from 10.49 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI.

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However, inflation of non-food articles - which include fibres, oil seeds and minerals - fell to 15.60 per cent from 16.05 per cent in the previous week.

Meanwhile, fuel and power inflation stood at 12.12 per cent, the same as in the previous week.

Headline inflation stood at 9.44 per cent in June. The Reserve Bank of India (RBI) has already hiked interest rates 11 times since March 2010, to tame demand and curb inflation.

In its Economic Outlook for 2011-12 released earlier this week, the Prime Minister's Economic Advisory Council projected headline inflation to remain high at around 9 per cent till October. The rate of price rise will ease from November, declining to around 6.5 per cent by March 2012, it said.

The report also said that while pressure from food inflation has fallen in recent months, the rate of price rice still remained quite high with the possibility of further surge in the coming months.