Food inflation rises to 9.80% for week ended Aug 13

Inching closer to the crucial double-digit mark, food inflation rose to 9.80% for the week ended August 13 on the back of dearer onions, potatoes, fruits and protein-based items.

Food inflation, as measured by Whole Price Index (WPI), stood at 9.03% in the previous week. The rate of price rise of food items in the corresponding week of August, 2010, was 14.56%.

As per data released by the government today, the price of onions soared by 44.42% year-on-year, while potatoes became 16.39% more expensive during the week under review.

During the week ended August 13, fruits became dearer by 27.01% and eggs, meat and fish by 13.37% on an annual basis.

The price of milk was up 9.51%, while vegetables and cereals became dearer by 6.52% and 5.22%, respectively.

However, pulses became cheaper by 5.56% and the price of wheat was down by 2.80% year-on-year.

Overall, primary articles recorded 12.40% inflation for the week ended August 13, up from 11.64% in the previous week. Primary articles have a share of over 20% in the WPI.

Inflation in non-food articles, which include fibres, oil seeds and minerals, stood at 17.80%, compared to 16.07% in the previous week.

Meanwhile, fuel and power inflation stood stable at 13.13% for the week ended August 13, the same as in the week ended August 6.

Seeking to allay concerns over the rate of price rise, Prime Minister Manmohan Singh had yesterday expressed confidence that headline inflation would come down to 6% by the year-end.

"I am not an astrologer, but analysts have said that by the end of this year, inflation will come down to 6%," Singh had said during an Iftar dinner hosted by him.

Headline inflation, which also factors in manufactured items, fuels and non-food primary items, besides food, stood at 9.22% in June.

The Reserve Bank has already hiked interest rates 11 times since March, 2010, to tame demand and curb inflation.

The RBI and the Prime Minister's Economic Advisory Council had projected headline inflation to remain high at around 9% till October.

Food inflation was in double digits for most of 2010, but started to moderate from March this year.

It fell to 7.33% in mid-July, before again rising to a four-and-a-half month high of 9.90% in end-July.

The rate of price rise of food items has been highly volatile in the past few weeks.

In its Economic Outlook for 2011-12 released earlier this month, the PMEAC said that while pressure from food inflation has fallen in recent months, the rate of price rice still remains quite high, with the possibility of a further surge in coming months.