Food inflation dips to 19-mth low of 8.6% on strong kharif harvest

Annual food inflation fell to 8.60% in week ended November 20, its lowest level in 19 months, thus strengthening case for headline inflation to moderate further in coming months. A week earlier, annual food inflation stood at 10.15%.

Wholesale fuel price index was up 9.99% in week ended November 20 from a year ago, government data showed on Thursday. Primary articles prices?including food, non-food articles and minerals?were provisionally up 12.72% in week to November 20 from 13.38% a week ago. The latest food inflation was the lowest since 7.99% in April 25, 2009. The number has remained in double digits since June 2009 and peaked at 22.93% in mid-June 2010.

Finance minister Pranab Mukherjee said food prices could fall further in coming weeks. ?Food inflation is coming down and I hope it will come down further,? Mukherjee said.

?Overall I feel that food inflation is on its way down because of good monsoon and strong kharif harvest, which has now started coming into the markets in full steam. But, this won’t have any impact of RBI’s policy stance as it is within their expectations,? DK Joshi, chief economist, Crisil rating agency.