The easing in inflation was expected as – the main seasonal factor for high food inflation – come down during winters. In November, vegetable prices showed a 4.5% month-on-month decline. However, year-on-year, vegetable prices have surged 29.33%. The month-on-month fall in prices has been witnessed across other categories like fruits, and meat and fish, pulses, etc.
However, edible oil and fat prices remain stubborn as they grew by 3% month-on-month and 13.28% year-on-year. Edible oil prices continue to rise because import duties on edible oil were increased in September this year to protect local farmers.
“In the coming weeks, we expect food prices to ease sequentially. Vegetable prices tend to come down in December when the kharif crop enters the market. A high base of last year will also help in lowering the reading,” says Dipti Deshpande, principal economist, Crisil. The non-food component of CPI remained low at 3.1% supported by the recent softening in global energy and commodity prices. Core inflation was lower than expected, remaining unchanged at 3.7% in November and October.