India’s food price index fell for a fourth straight week as the cost of onions, vegetables and wheat declined.
A gauge measuring wholesale prices of agricultural products dropped 1.03% in the week ended 14 January from a year earlier, the commerce ministry said in a statement in New Delhi on Friday. It declined 0.4% the previous week.
India cut the amount lenders must set aside as reserves for the first time since 2009 on 24 January, joining nations from Brazil to Thailand in easing monetary policy as Europe’s debt crisis hurts global growth. Headline inflation moderated to a two-year low of 7.47% in December, increasing the central bank’s scope to shield economic expansion.
Food inflation will continue to remain low as the prices of fruits and vegetables are declining, N.R. Bhanumurthy, a New Delhi-based economist at the National Institute of Public Finance and Policy, said before the release. The Reserve Bank of India may cut its repurchase rate by a quarter of a percentage point to 8.25% at its March monetary policy meeting, he said.
The price of vegetables tumbled 47% in the week ended 14 January from a year earlier, Friday’s report showed. Wheat costs slid 3.4% and onions dipped 79%. India will discontinue the weekly release of inflation data, government spokeswoman Neelam Kapur said on 25 January, without elaborating further.
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