India's Food Inflation Surges

India saw its food inflation surging in 2009-10. The Primary food inflation was 17.9% in January 2010, manufactured food products 26.4% in December 2009. The CPI-IW was 15% in December 2009.

In the short run, government must ease supply by increased distribution from stocks and in the medium term by improving productivity.

The Energy index and manufacturing goods index (except food) did not rise much for most of 2009-10 but are now moving up.

The Danger of significant transfer of food price inflation to the general price level in 2010/11. There is also risk of rise in international commodity prices.

Source : Equity Bulls

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