Food inflation at a 10 week high

Food inflation rose to a 10-week high of 14.44% in the week ended December 18 on the back of soaring onion, vegetable, fruit and other commodity prices, prompting the government to raise its year-end headline inflation forecast to 6.5%. Food inflation was 12.13% in the previous reporting week. There could be more bad news in store, with economists saying that poultry and milk were likely to further exert pressure on food inflation, though vegetable prices are expected to moderate in the coming weeks. During the week ended December 18, rising onion price was the main culprit, recording a 40% hike from a year ago, while vegetable prices jumped 29.26%. Fruit prices rose 21.97% and egg, meat and fish went up by 20.34%. However, cereal inflation declined significantly, and economists attributed it to the improvement in supply due to the good monsoon.

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