RBS:: India Strategy - Primary food prices back to Nov levels

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India Strategy 
Primary food prices back to Nov levels
The primary food price index for the week of 5 February 2011 was 182.9, down
2.1% week on week, and 5.2% from the peak of 192.9 for the week of 1 January
2011.

! Yoy primary food inflation for the week of 5 February, 2011 declined to 11.1% from 13.1% in
the prior week, as primary food prices declined 2.1% wow The decline was primarily driven by
the 18% wow decline in vegetable prices. The spike in vegetable prices in December was
what caused the upside surprise in headline WPI inflation in December.
! Post the recent decline, the primary food articles price index is almost back to the levels last
seen in late November/early December. Specifically, the index's level of 182.9 compares to a
reading of 181.8 for the week of 27 November 2010.
! Yoy primary articles inflation declined to 14.6% for the week of 5 February 2011 from 16.2%
the week earlier driven by the decline in primary food inflation. Among the other components,
fuel inflation was 11.9% up slightly from 11.6% in the prior week, while non-food articles
inflation declined to 27.1% from 28.5%.