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Food inflation soars to 6-month high as veggies turn pricey

NEW DELHI: Food inflation quickened in mid-October as prices of vegetables soared, sustaining the pressure on overall inflation and the Reserve Bank of India. Data released by the commerce and industry ministry on Thursday showed food inflation at 11.43% in the week to October 15, accelerating from the previous weeks 10.60%. It stood at 14.20% in the same year-ago period. Economists said Thursdays food inflation number was a concern. The headline number is worrisome. Going forward, the base effect may have an impact on food inflation in November and December but if we start off on a high plane it might be difficult to bring it down to the comfort zone even with a strong base effect, said Samiran Chakraborty, economist at Standard Chartered Bank . Prices of vegetables rose 25% year-on-year during the week under review, compared to 17.59% annual increase in the previous week. Fruit prices were up 11.96% year-on-year while egg, meat, fish prices rose an annual 12.82%. Price of pulses, which had shown some signs of easing earlier due to improved supplies, have started to climb. During the week to October 15, price of pulses rose an annual 9.06%. In the previous week, it had gone up by 7.42%. But prices of onions, which had soared previously, eased significantly. It fell 18.93% in the week to October 15, continuing its downward trend witnessed in the past few weeks. Prices of protein-based items have been stubborn for more than a year as demand remains strong due to rising incomes and dietary changes. Policymakers have expressed concern at the stubborn nature of food inflation and have called for improving supplies. Stubbornly high inflation and rising interest rates have played havoc with household budgets. Consumers have deferred purchases hoping for prices to ease.

                                                                                                               
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