Food inflation crosses 15% on costlier cereals and milk

Food inflation reached 15.10% for the week ended September 4 as cereals, select vegetables and milk became costlier after rains disrupted the supplies.

This figure, though not exactly comparable to the previous week’s 11.47% because it is calculated on the new series with 2004-05 as the base year, justified the RBI’s move to raise its short term lending and borrowing rates at the monetary policy review today.

This is the third consecutive week when food inflation has shown an upward trend, after a brief period of moderation in July and first half of August.

On yearly basis, cereals prices rose by 7.16% driven mainly by higher prices of pulses, rice and wheat, compared to the same period last year.

While pulses became dearer by 6.10%, prices of rice and wheat rose by 5.74% and 10.16%, respectively, during the week under review, on yearly basis.

Among other food items, milk prices soared by 23.41% during the week compared to the same period last year, while that of fruits went up by 8.27%.

Vegetables also became dearer by 3.82% on an annual basis, while potato and onions became cheaper by 45.92 and 4.17%.

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