The cut in fuel prices though intended to bring some relief to consumer won?t lead to drastic fall in prices of fruits and vegetables which has been showing constantly rising since the last few weeks, that has contributed in pushing up the food inflation to a calendar year high of 10.5% in the latest week ending November 22.
India Friday cut fuel prices for the first time in nearly two years. Petrol prices have been reduced by 10%, while diesel prices have been cut by around 6%. Although, most analysts are divided on whether the rise in food inflation was due to high fuel prices which have a direct bearing on transportation of fruits and vegetables or was due to unseasonal rains in late July, but most feel it will take some time before cut in fuel prices is percolated down.
According to government data, vegetable prices which were declining in the three months from July to September has suddenly moved up touching double digit levels by the end of October and then scaling to a calendar year high of 24.9% in the latest week.
Similarly, prices of fruits, which have been falling at the start of the year has been pushing up in the 15-17% in the recent weeks. Condiments and prices, where supply shortages seem to continue unabated, have seen their prices continue to rise by double digits since May. ?Mercury in a thermometer rises fast, but unless you shake it doesn?t come down,? said RS Deshpande, director of Institute of Social and Economic Change, underlying the fact that food inflation will take some time to come down.
?It is only around January we can expect some moderation in food inflation because of the impact of fuel price cut, and that too will be minimal,? Deshpande added.
While food inflation in India rose, in global markets commodity price indices of food have fallen by an average rate of 10% since August.