Food inflation soars to 17.05 pc, FM gravely concerned

New Delhi, Feb 3 (PTI) Providing no respite to the commonman, food inflation rose to 17.05 per cent for the week endedJanuary 22, as Finance minister Pranab Mukherjee expressed"grave concern" and assured steps to moderate it.

Driven by higher prices of vegetable, fruits and eggs,food inflation increased for the second week in a row, soaringby 1.48 percentage points from 15.57 per cent in the previousweek.

"Price rise always, particularly, the commodity price andfood items are matter of grave concern" Mukherjee toldreporters when asked to comment on the rising inflation.

Mukherjee said efforts are being made both from the demandand supply side to moderate it.

Food inflation had stood at 20.56 per cent during thesame period a year ago.

Although the vegetable prices are likely to moderate inthe coming weeks, protein-based food items like milk, fish andegg are expected to remain firm.

"Real stubborn components are the fibre items, milk, eggand fish. We need to improve production, storage facility andprocessing," Crisil''s Principal Economist D K Joshi said.

Moreover, he added, the impact of political crisis inEgypt and other middle-east countries on global crude oilprices may cast a shadow on headline inflation, which shot upto 8.43 per cent in December from 7.48 per cent a month ago.

Inflation in "Fuel and Power" segment showed an increaseof 11.61 per cent year-on-year following an increase of petrolprices by Rs 2.50 per litre in January.

Among vegetables, onion prices on annual basis rose by130.41 per cent in the third week of January, although theyhave moderated considerably in the recent days.

Vegetables as a whole became dearer by 77.05 per cent onan annual basis followed by fruits (15.47 per cent), egg, meatand fish (15.05 per cent), milk (11.41 per cent) and potato(6.22 per cent).

The uptick in latest food inflation figure is likely toput further pressure on the government to provide relief tothe common man in the coming budget.

Both the government and the Reserve Bank have beengrappling with high inflation and slowing industrial growththat dipped to the 18-month low of 2.7 per cent for November.

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