After declining for two consecutive weeks, flood inflation again rose during the week ended May 1 mainly because of rise in prices of fruits and vegetables.
According to the data released by the commerce and industry ministry on Thursday, food inflation rose to 16.44% for the week ended May 1 from 16.04% reported a week before that.
Potato became dearer by 5.95%, tea by 5%, fruits and vegetables by 2% while prices of urad, arhar, masur, condiments and spices went up by 1% each. On an annual basis, pulses prices rose by 32.49% and fruits by 15.51%. Prices of barley declined by 2% and maize, ragi and jowar by one per cent each. Food inflation had crossed 20% in December. Though food inflation showed some signs of firming up, but most analysts feel that it is temporary and inflation would moderate in the second half of 2010-11 financial year because of good rabi harvest. By then the progress of monsoon would also give direction to the inflation rate.
RBI deputy governor Subir Gokarn on Wednesday stated that overall inflationary pressure was starting to become ?visible?. Earlier this week, finance secretary Ashok Chawla had said overall inflation is likely to moderate to more acceptable levels due to good rabi (winter) crop and better rainfall prediction.
According to a Fe analysis earlier this week, food prices across most big cities in the country had remained largely stable during the week ending May 10, mainly due to good rabi arrivals and positive outlook about the forthcoming monsoon season, which curbed any possibility of speculative hoarding.
Traders said scattered rains in some parts of northern and central India also helped in keeping prices down as it signaled that monsoon might be normal this year. Rice prices in the retail markets across 10 major cities tracked from the department of consumer affairs records remained in the range of Rs 17 to Rs 23 per kg. Country?s overflowing foodgrains stocks on May 1, 2010 were estimated to be over 40 million tonnes also had a big role in keeping retail markets down. ?No trader wants to hoard grain now, as there is no incentive to do so,? a Delhi-based foodgrain wholesaler said.