Food price inflation stays negative for third week

Food price inflation in India continued to stay negative for the third consecutive week with the food price index falling 0.42 per cent year-on-year during the week ended 7 January 2012. It was (-) 2.90 per cent during the previous week.

The decline in the wholesale price-based inflation rate was aided by lower prices of vegetables, following an increase in supplies of seasonal vegetables.

Although prices of most other essential commodities continue to rule high, the decline in inflation rate is expected to help the Reserve Bank of India (RBI) ease its monetary policy stance.

Food price inflation in the country stood at 16.18 per cent during the comparable period of the previous year. Build-up of inflation so far during the financial year was 6.59 per cent against 16.61 per cent in the comparable period of the previous year.

The index for the 'food articles' group rose 0.1 per cent to 190.9 (provisional) during the week ended 7 January 2012 from 190.8 (provisional) during the previous week.

During the week, prices of jowar and maize were up 3 per cent each while bajra, masur and poultry chicken were dearer by 2 per cent each and barley, arhar, moong and fish (marine) turned dearer by 1 per cent each.  However, the prices of tea (down 2 per cent) and egg and condiment and spices (down 1 per cent each) declined.