Food Inflation reached Double-digit 10.05% for the Week ended 20 August 2011

Food inflation reached the double-digit limit, 10.05% for the week ended 20 August 2011 as per the data released by the Ministry of Commerce and Industry on 1 September 2011. The food inflation crossed the double digit mark after five months. The rise was mainly due a huge increase in prices of vegetables and onions.

Food inflation, as measured by wholesale price index (WPI) stood at 9.80 per cent during the previous week ended 13 August 2011. Food inflation had entered the double-digit mark on 12 March  2011 at 10.05 per cent. Food articles have a weight of 14.34 per cent in the overall WPI basket.

According to a data vegetable prices jumped 11.64 per cent week-over-week while onion became costlier by 12.34 per cent during the week. Inflation in onions rose to a whopping 57.01 per cent during the week. Prices of wheat and pulses also rose 0.12 per cent and 0.83 per cent respectively.

A few other items like cereals showed just a marginal rise and many others like protein-based articles registered a decline in inflation compared to the previous week. Onion prices are again proving to be a problem. The latest data showed that  fruits  price shot up to 21.58%, egg, price of meat and fish  increased to 12.62%, vegetables 15.78% and potato price increased to 13.31%.

Analysts are of the opinion that seasonal factors like heavy rainfalls in some parts of the country pushed the prices up.

Headline inflation in June 2011 stood at 9.22 per cent. Both the central bank and PMEAC had projected headline inflation to remain high at around 9 per cent till October 2011.