Food inflation declined for the second week in row to a two month low mainly due to softening of prices of pulses, wheat and potato. According to data released on Thursday, food inflation declinedto11.05% fortheweek ended February 5 from 13.07%inthepreviousweek. Analysts and experts say foodinflationlevel isexpected to fall to single digit level during the next few weeks because of arrival of kharif cropin themarket.
FinanceministerPranab Mukherjee said food inflation willalsobeundersingle digit.The prices of potatoes declined by 13.63%, while pulses became 5.88% cheaper and wheat 2.54% less expensive on an annual basis, thedata said.
However, vegetables became nearly 24% costlier during the week ended February 5, pushed up mainly by a 31.33% increase in onionprices.
?With decline vegetables in the last oneweek, food inflation may not rise back to last year?s high,? Ramesh Chand, director, National Centre for Agricultural Economics and Policy Research told FE.
As per yearly comparison, fruit and milk prices roseby12.21%and11.66%respectively, while egg, meat andfishbecame15.14%deareronanannualbasis.
?Milk?s contribution is likely to go up, and hold a sway over the declining trend contributed by vegetables. Spiceswouldhavegone up,but its contributiontothe indexissmallwhichmaynot caused a spike as such,? Anand James Chief Analyst, GeojitComtradesaid. FEhad reported on Tuesday that the retail prices of key vegetables such as onion, cabbage, cauliflower, garlic, bitter gourd have declined substantially during last one months. Even poultry products prices have moderated during the last fewweeks.