Driven by higher prices of vegetable, edible oil and milk products, retail inflation rose to 10.4% in April, from 9.4% in March, data released on Friday showed. Reading for March was revised down to 9.38%, from 9.47% estimated initially.
"We expect food inflation to remain elevated due to a likely rise in minimum support prices for food crops and risk of a below-normal monsoon," Nomura economist Sonal Varma said in a note.
Core inflation, a measure of demand in the economy, moderated to 10.6% in April, from 10.8% in March. Core inflation excludes volatile fuel and food elements.
Consumer Price Index (CPI), a national measure of retail inflation, was launched in January last year. The lack of historical series for CPI leaves wholesale price inflation as the most widely followed measure of inflation.
Wholesale price index-based inflation rose to 7.32% in April, from 6.95% in March.
"The CPI is a new index, and given the absence of trends/seasonal effects, it's unlikely to be currently used as a key determinant of monetary policy," wrote Rohini Malkani of Citi in a note, adding that she expected one more rate cut this year because of the pressure on prices.
The higher consumer inflation is largely because of the larger weight for food items in the retail basket. Food items have a 47.6% weight in the retail basket.
"In terms of policy response, while core WPI inflation has moderated and growth continues to weaken, the Reserve Bank of India ( RBI) cannot ignore rising food inflation since it affects households' inflation expectations," Varma said.
The weaker rupee and the likely fuel price rise could harden inflation further.
The Reserve Bank of India had cut repo rate by 50 basis points in its mid-monetary policy review to revive growth, but may not be able to do more even as industrial production contracted 3.5% in March.
At 11.1%, urban retail inflation was higher than 9.9% rural inflation. The difference is largely because rural index does not include housing.
Inflation rates for urban and rural areas were 10.3% and 8.7%, respectively in March.
Consumer prices of vegetables were up 24.6% in April, while edible oils rose 17.6%, and milk was up 14.9% in April from a year ago.
Prices of egg, fish and meat shot up 10% while non-alcoholic beverages became costlier by 9.5%.
Increase in wholesale value of fruit and vegetables but lower volume - Times of Malta
While the volume of fresh fruit and vegetables declined by 16 per cent in the first quarter, the wholesale value increased by 9.3 per cent, when compared to the same period last year, according to the National Statistics Office.
The NSO said that fresh fruit and vegetables supplied in the first quarter dropped to 8.4 million kilogrammes, from 10 million kilogrammes in the corresponding quarter last year.
On the other hand, the wholesale value rose by 9.3 per cent, from €5.2 million in the first quarter of 2011 to €5.7 million this year.
The volume of fresh vegetables fell by 15.3 per cent to 8 million kilogrammes over the comparative period last year.
Declines were registered in the supply of cauliflowers (-27.8 per cent), marrows (-22 per cent), potatoes (-13.9 per cent), dry onions (-33.5 per cent) and lettuce (-30 per cent).
In contrast, the wholesale value of fresh vegetables advanced by 13.4 per cent to €5.1 million.
During the period under review, the supply of fresh fruit declined by 28 per cent, mainly due to a drop in the supply of oranges (-34.2 per cent), sweet oranges (-29.3 per cent) and strawberries (-28 per cent).
Furthermore, the wholesale value of fresh fruit decreased by 16 per cent, to €0.6 million.
The volume of fresh fruit and vegetables supplied by Maltese farmers decreased by 14.6 per cent over the corresponding period in 2011
Maltese farmers supplied 7.8 million kilogrammes of fresh fruit and vegetables, or 92.2 per cent of the total supply.
The wholesale value of fresh fruit and vegetables rose by 12.1 per cent, from €4.6 million to €5.1 million.
Gozitan farmers contributed 0.7 million kilogrammes of fresh fruit and vegetables, or 7.8 per cent of the total supply.
The volume and wholesale of fresh fruit and vegetables declined by 29.2 and 10.6 per cent respectively over the comparative quarter last year.
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