New Delhi (Agencies): Food inflation dropped to a seven-week low of 13.07 per cent in end-January, as prices of potatoes and pulses eased. The common man, however continues to feel the pinch of high rates of vegetables.

Onion prices, which more than doubled in the previous week, has eased subsequently. However, the kitchen staple still remain dearer by 79 per cent for the week under review. Vegetables as a whole have turned costlier by 44.34 per cent on an annual basis during the week under review.

Food inflation, which snapped the three-week rising trend, fell by nearly 4 percentage points from 17.05 per cent in the week ended January 22. It was 22.08 per cent a year-ago.

The last time food inflation has come down to such a level was for the week ended December 11 when it stood at 12.13 per cent.

Fall in inflation rates likely

Experts said there would be further fall in inflation rates owing to the expected record crop of wheat and pulses.

Government estimates suggest overall foodgrain production for 2010-11 at 232.07 million tonnes, against 218.2 million tonnes last year.

Wheat production is estimated to touch an all-time high of 81.47 million tonnes in 2010-11 crop year. Pulses and cotton production are also propelled to set fresh records of 16.51 million tonnes and 33.9 million bales, respectively.

"In the coming weeks we could expect further moderation in food prices, specially foodgrains. The expected record production of wheat and pulses will act as a factor in easing
the food prices," Crisil chief economist D K Joshi said.

"The overall WPI inflation for January 2011 is expected at around 8.5 per cent, on back of high primary inflation," ICRA economist Aditi Nayar said.

The decline in food inflation numbers is also unlikely to ease pressure on Reserve Bank, whose current monetary policy stance is anti-inflationary.

The apex bank had last month raised short term lending and borrowing rates by 25 basis points to tame rising prices.

During the week ended January 29, prices of pulses fell 8.63 per cent, potatoes by 8.87 per cent and wheat by 3.58 per cent on an annual basis, data released by the government showed.

Vegetable prices to ease

ICRA's Nayar, however, said that vegetable prices are expected to ease in the coming weeks.

During the week, fruits and milk became costlier by 10.46 per cent and 11.66 per cent respectively, while egg, meat and fish turned expensive by 17.06 per cent.

Experts, however, said that high international crude prices may act as a dampener in moderating the headline inflation.

For the week ended January 29, "fuel and power" category prices shot up 11.61 per cent on an annual basis, while petrol became expensive by over 30 per cent.

There is apprehension that the political stalemate in Egypt could affect flow of crude through the Suez Canal, the world's busiest commercial waterway.

Similar views have already been expressed by the Finance Minister Pranab Mukherjee, senior government officials and the RBI deputy governor Subir Gokarn.