After rising last week, food inflation declined marginally, mainly due to lower prices of pulses and vegetables.

According to data released on Thursday by the ministry of commerce and industry, food inflation declined to 8.96% for the week ended June 4 from 9.01% in the previous week.

During the week under review, price of pulses went down by more than 10% in comparison with the same period last year, while vegetables became cheaper by 1.39%.

The third advance estimate released by agriculture ministry had predicted the pulses output to go up to a record 17.29 million tonne this year.

?Food inflation would remain under moderation due to good progress of monsoon,? PK Joshi, senior programme coordinator, International Food Policy Research Institute, told FE . However, he added that a marginal decline in food inflation this week does not indicate any trend.

The drop in food inflation comes at a time even as the Reserve Bank of India (RBI) hiked its key policy rates for the 10th time since March 2010 to tame demand and curb inflation.

The latest hike of 25 basis points in the short-term lending (repo) and borrowing (reverse repo) rates was announced on Thursday.

However, the data released by the commerce and industry ministry also said the prices of other food items continued to move upward.

Fruits became dearer by 30%, while milk went up by 10.59%. Eggs, meat and fish became dearer by 7.31% on an annual basis.

The prices of onions went up by 12.17% and potatoes by 1.14%. Cereals were also up by 5.25%.

Food inflation was in double digits for most of last year, before showing signs of moderation since March this year.

However, it had again crossed the 9% mark during the last week of May after a gap of two months.

FE had reported that due to a prolonged winter and comfortable stocks, retail prices of key vegetables such as onion, potato and tomato have been stable despite the onset of summer.

Experts attribute the stable prices to bumper production during last few seasons, leading to comfortable stock, and an improvement in the supply system.

The RBI in its mid-quarter credit policy review also said that the progress of the southwest monsoon has been ?satisfactory? so far and will help boost farm production in the 2011-12 crop year.