After declining for a week, the country?s food inflation again started to look northwards. The upward movement in prices may renew calls for tightening of interest rates.
Food inflation rose by 16.9% for the week ending June 12 because of rise in prices of pulses, milk and a number of vegetables.
Inflation went down marginally to 16.12% for week ending June 5, from 16.74% reported a week before.
According to data released on Thursday by commerce and industry ministry, year-on-year prices of potato and onion declined by 36% and 22%, repectively while prices of pulses and vegetables saw a huge jump by 34% and 21%, respectively.
Similarly, the prices of vegetables rose by 8.06% and prices of condiments and spices were up by 3% . Urad, moong and tea became expensive by 1% each over the previous week.
The government statement also state that mutton price was down 2% , and sea fish and arhar was cheaper 1% each over the week.
An FE analysis of price movement of various vegetables shows that price of key agricultural commodities such as potato and onion is expected to be stable because of bumper crop this season. Finance minister Pranab Mukherjee, had recently expressed the hope that food prices would decline by mid-July in view of the likelihood of a good monsoon.
