New Delhi: Food inflation shot up to 15.58% for the second week of November on the back of potato prices, which have more than doubled in the past one year.
Other essential items like pulses and onion rose by more than 25% in the wholesale market, government data on inflation for week ended 14 November showed.
“Food inflation is incredibly high...The drought has aggravated the situation and I expect the wholesale price- based inflation to rise to around 7% by March next year,” said HDFC Bank economist Jyotinder Kaur.
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With inflationary pressure building up, the RBI in its next policy review may take steps to check easy money. “It is likely that RBI in its January policy might go for monetary tightening measures and raise Cash Reserve Ratio (CRR) or policy rates,” Kaur said.
According to the inflation data, potato prices rose by 111%, pulses by 35% and onion by 27% in the one-year period ending November 14.
Staple items like wheat and rice rose by 12% each during the period. Vegetable too continued to stalk consumers registering a 12% rise during the same period.
However, among fuels petrol prices fell by 12%, cooking gas by 7% and diesel by 6%.
Food inflation for the week ended 14 November was higher significantly even when compared on weekly basis.
Axis Bank Economist Saugata Bhattacharya said the nature of persistence of higher food prices is worrying.
“I expect wholesale price inflation to rise between 7 and 8 per cent by March-end,” he said.
Among other items urad and poultry chicken prices rose by 15 per cent each, eggs by 8 per cent, moong by 6 per cent, arhar by 5 per cent and fruits & vegetables by 3 per cent.
Led by costlier food prices, wholesale inflation rose to 1.34 per cent in October from 0.50% in the previous month. Inflation had remained in the negative for 13 straight months before trudging into positive in the first week of September at 0.12%.
Among non-food articles, raw silk rose by 3% and fodder and groundnut seed by 2% each.
Barley, however, fell by 2% and tobacco by 3%. Fuel index, on the other hand, remained unchanged at the previous week’s level.
The primary articles index rose by 1.2% on weekly basis and 11.04%on annual basis.
Graphics by Sandeep Bhatnagar / Mint