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Inflation up at 10.86% on dearer cereals & milk
Published on 4 Sep. 2010 11:41 PM IST
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Despite expectations of a better kharif output because of the widespread monsoon rains, the country’s food inflation hasn’t yet shown a definite sign of falling. According to The Financial Express, the data released by commerce and industry ministry, food inflation rose to 10.86% for the week ended August 31. Inflation was 10.05% during the previous week, while it was 14.86% a year ago.
The rise in food inflation has been attributed to higher prices of cereals, milk and fruits. However, prices of vegetables, especially onion and potato, has declined. Analysts and experts said inflation would stabilise during the next few months after the full kharif harvest comes into the market.
On an annual basis, cereals turned expensive by 6.67% for the week under review. Within this group, prices of pulses rose 14%, while rice and wheat increased 8.05% and 7%, respectively. However, vegetable prices went down substantially compared to last year and were less expensive by 9.90%. In vegetables, potato was cheaper by 51.25%, while onion went down by 8.97% on an annual basis.
“Food inflation will continue to decline as the country is experiencing comparatively favorable weather conditions which is reflected in increased food production. However even after falling from the highs of over 12% previously, 10.05% still can be said to be on the higher side,” Basant Vaid, senior research analyst, Bonanza Commodity Brokers said.

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