New Delhi: Coming as a timely respite from soaring prices of food item, food inflation remained in the negative zone for the second consecutive week at (-)2.90 percent for the week ended December 31, 2011.
    
Food inflation, as measured by the Wholesale Price Index (WPI), stood at (-)3.36 percent in the previous week. It was above 19 percent in the corresponding week of 2010.
    
According to data released on Thursday, onions became cheaper by 74.77 percent year-on-year during the week under review, while potato prices were down by 31.97 percent. Prices of wheat also fell by 3.35 percent.
    
Overall, vegetables became 49.03 percent cheaper during the week ended December 31.
    
The fall in the rate of price rise of food items since the first week of November is substantial, as it has plummeted from double-digit territory into the negative zone.
    
Experts feel that the decline in food inflation will be a major incentive for the Reserve Bank to look at the option of cuts in key interest rates at its next quarterly monetary policy review later this month.
    
However, other food products became more expensive on an annual basis, led by protein-based items.     

Pulses were 14.72 percent costlier during the week under review, while milk grew dearer by 10.79 percent. Egg, meat and fish prices were up 15.22 percent year-on-year.
    
Fruits also became 9 percent more expensive on an annual basis, while cereal prices were up 2.03 percent.     

Inflation in the overall primary articles category stood at 0.51 percent during the week ended December 31, as against 0.10 percent in the previous week. Primary articles have over 20 percent weight in the wholesale price index.
  
Inflation in the non-food segment, which includes fibres and oilseeds, was recorded at 1.29 percent during the week under review, as against 0.85 percent in the week ended
December 24, 2011.
    
Fuel and power inflation stood at 14.45 percent during the week ended December 31, as against 14.60 percent in the previous week.
    
Headline inflation, which also factors in manufactured items, has been above the 9 percent-mark since December, 2010. It stood at 9.11 percent in November, 2011.
    
The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation.
    
In its second quarterly review of the monetary policy last month, the central bank had said it expects inflation to remain elevated till December on account of the demand-supply mismatch before moderating to 7 percent by March, 2012.

(Agencies)