Pick-up in food inflation should prove fleeting

Inflation is likely to have picked up in June. The knee-jerk response may be to link it to the monsoon, but the rise in headline inflation is due more to the collapse in food prices a year ago. Looking ahead, the relatively small increase in minimum support prices announced for FY15/16, low global prices and the government’s ample stockpiles of key crops should help to keep food inflation in check.

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