Food inflation slowed down marginally to 8.06 per cent for the week ending May

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21 from 8.55 per cent in the previous week due to higher food supplies and reduced summer demand for a number of high protein items. Hike in petrol prices just two weeks ago will get reflected in the current week data with non-food inflation rising in the weekly data.

Reacting to lower weekly food inflation numbers, finance minister, Pranab Mukherjee, said government hopes both food and primary articles inflation will come down over coming weeks. But some uncertainty remains over high fuel prices. “If the declining trend in food items and non-food primary items continues, then perhaps it will be possible to have a moderate rate of inflation,” finance minister Pranab Mukherjee said.

“The important figure is non-food WPI. There is pra-ctically two percentage point decrease from 23.22 per cent to 21.31 per cent (in it). My comment is, there will be moderation in inflation,” Mukherjee said, adding, decline is evident in overall primary articles as well.

The Indian crude oil basket is currently ruling above $ 100 per barrel and oil marketing companies (OMC) were allowed to hike recently domestic petrol prices for the ninth time in eight months. Petrol prices had gone up to Rs 62 per litre in Delhi after the nine hikes.It was Rs 48 per litre eight months ago.

On June 9, a ministerial panel set up to review prices of petroleum products is likely to take a call for hiking diesel, LPG and kerosene prices to reduce the government’s subsidy burden, in view of surging global crude prices.

Among food articles, rates for wheat, pulses and major grains and cereals witnessed a decline due to higher rabi arrival. Onion prices rose 12 per cent and milk prices rose seven per cent during the week under review. Prices of high protein diet too continued to rise, though at a slower rate than last week. Inflation in fruits declined to 30.51 per cent from 32.37 per cent a week ago. Eggs, meat and fish declined to 5.5 per cent from 8.26 per cent in the previous week.

“Summers usually curtail demand for high-protein foods, though demand for milk and fruits rises. This is what we are witnessing in this week’s inflation numbers. You will see that rate of inflation stood higher till about March-end for all high-protein food items,” said research head with Agriwatch, a farm business consulting firm, R Raghuraman,

Market economists, for whom double digit food inflation through the earlier part of the year had remained a prime concern, said fall in non-food and food inflation may not be sustained in coming weeks.

Voicing concerns that a full impact of oil price increase is yet to unfold, macro economist and director with financial services firm KASAA, Siddharth Shankar said: “The numbers have shown some improvement, but it is too early to say that inflation will fall in the coming months.”

Inflation in non-food primary articles came down to 23.31 per cent for the week under review. Natural fibres (mostly cotton) prices stood up 55 per cent on year, compared to 60 per cent till last week. Oil seeds prices rose to 13.23 per cent on year, as compared to 11.58 per cent the previous week.