Food inflation, as measured by the Wholesale Price Index (WPI), was at (-)0.42 per cent in the previous week. It was above 17 per cent in the corresponding week of 2011.
According to the official data released today, onion prices fell steeply by 79.10 per cent, year-on-year, for the week under review, while potato prices were down 22.46 per cent.
Prices of wheat also fell by 3.37 per cent. Overall, vegetables were 47.06 per cent cheaper during the week under review, from the same period last year.
However, other food products, led by protein-based items, became more expensive on an annual basis. Pulses prices were 12.77 per cent higher, while milk grew dearer by 12.25 per cent. Eggs, meat and fish prices were up 20.33 per cent year-on-year.
Fruits also became 5.17 per cent more expensive on an annual basis, while cereal prices were up 2.71 per cent.
Inflation in the overall primary articles category stood at 1.89 per cent for the week ended January 14, as against 2.47 per cent in the previous week.
Primary articles have over 20 per cent weight in the wholesale price index. Experts feel that the decline in food inflation, along with moderation in headline or overall inflation in December, will be a major incentive for the Reserve Bank to look at the option of cutting key interest rates in the near future.
At its third quarterly monetary policy review earlier this week, the apex bank had injected Rs 32,000 crore into the system by lowering the Cash Reserve Ratio (CRR) by half-a- percentage point to 5.5 per cent but kept the short-term lending rate unchanged.