India Food Inflation Eases Slightly

India's food inflation rate eased slightly in the week ended March 26, but fell short on market expectations of a bigger relief from sticky prices.

The year-on-year food inflation rate fell to 9.18% from 9.50% in the previous week, according to data issued Thursday by the Ministry of Commerce and Industry. However, the index of food articles was up 0.4% to 179.5 during the week, from 178.7 in the previous week.

The data will fuel worries that inflationary pressures won't ease sharply soon, firming expectations of a rate increase in May when the central bank meets to review monetary policy.

Indian government bonds slipped after the data, with the most-traded 8.08% paper due in 2022 falling to 100.09 rupees ($2.28) from 100.13 rupees before.

"Inflation is showing signs of downward stickiness and the RBI [Reserve Bank of India] will have to continue increasing rates to bring it under control," said Manoranjan Sharma, chief economist at Canara Bank.

Mr. Sharma said rising crude oil prices will further stoke inflationary pressures, adding to the urgency to tighten monetary policy.

"If oil prices continue to rise the government at some point of time will have to pass on the burden to consumers," which will push up inflation, he added.

Mr. Sharma expects the RBI to increase its two main policy rates by 25 basis points at the next review on May 3 and by 50-75 basis points in 2011.

The RBI has raised its borrowing rate by a cumulative 2.25 percentage points and the lending rate by 1.75 percentage points since March 2010, as it grapples with intolerably high inflation driven by supply shortages and rising demand pressures.

The general inflation rate was 8.31% in February. The central bank has raised its inflation estimate for the end of March thrice, the last time to 8% from 7% at its March 17 policy review.

Economists say the central bank has been slow in anticipating price pressures and that inflation will likely overshoot the 8% projection.

Bank of Baroda Chief Economist Rupa Rege Nitsure expects inflation to accelerate to 8.9% in March, contrary to the RBI's view.

Thursday's data also showed the index for primary articles rose 0.5% to 188.2 in the week to March 26. It was little changed at 12.97% during the week on an year-on-year basis. The fuel products index was unchanged from the previous week at 158.5.

400 ill by adulterated "kuttu ka atta' floor

Over 400 take ill after eating adulterated kuttu atta

Over 400 people were hospitalized in Delhi and neighbouring cities in Uttar Pradesh with symptoms of food poisoning on Tuesday.

All the patients, who were admitted to different hospitals in the capital and Meerut, Ghaziabad and Bulandshahr, had allegedly consumed adulterated buckwheat (kuttu atta) on Monday night.

In all, 115 people were taken to Guru Tegh Bahadur hospital, Hedgewar hospital and Lal Bahadur Shastri hospital in east and northeast Delhi with complaints of vomiting, stomachache, diarrhoea and dizziness.

Although no one is reported to be in a serious condition, police said they have detained several people in connection with the alleged food poisoning. Separate cases have been registered at Nand Nagri, Kalyanpuri and Mayur Vihar police stations. The state health department has ordered an investigation into the matter.

In Ghaziabad, Meerut and Bulandshahr, at least 150 were admitted to hospitals while 200 others were discharged after treatment. They were also reported to have consumed kuttu atta, a flour used during navaratra, which is under way.

In Delhi, it all started at 7am when several people made a beeline to different hospitals with symptoms of food poisoning. Medical Superintendent of Lal Bahadur Shastri Hospital Dr Veer Singh said that the hospital had received 58 patients with abdominal pain, vomiting and nausea. "None of them is in a serious condition. Some have even been discharged," he added.

At GTB hospital and Dr Hedegwar hospital, officials confirmed that they received about 40 patients with similar complaints. "After enquiring from patients we found all had consumed food made from buckwheat, a compulsory ritual for the ongoing Navratra festival," said the official. Some patients were also taken to private nursing homes in the locality.

Police said they have registered a case under sections 272, 273 and 336 of IPC against Nandu Masala Mill, owned by Nand Kishore, 45, located in Mandoli area. Kishore has been arrested in connection with the incident and flour samples from his mill have been seized by the SDM of the area. "Nandu Masala Mill is found to be the manufacturer of the buckwheat flour consumed by the victims.

The District Administration and emergency services have been alerted and teams of Food and Adulteration Department have also been put in service," said Delhi Police spokesperson Rajan Bhagat adding the victims had purchased the buckwheat in the retail open market. Ten people have been detained in connection with the incident, he said.

"People are advised to check the expiry date of the packet containing kuttu flour and the name of flour mills before using it. They are also advised not to purchase kuttu flour from open sacks," the spokesperson cautioned. The district administration and emergency services have been alerted and teams of the food and adulteration department have also been pressed into service.

Delhi Health Minister A K Walia ordered a probe into the matter and said more teeth would be given to the Food Adulteration Act to include maximum punishment of life imprisonment and a penalty of up to Rs 10 lakh for those involved in such illegal activities."

In Uttar Pradesh, the state's Food and Drug Authority swung into action but after the problem assumed epidemic proportions. By afternoon, at least 72 were undergoing treatment at the Bulandshahr district hospital, 60 were admitted to Ghaziabad district hospital and 24 were at Meerut district hospital.

Following orders from the state government, raids begain across 12 districts of the NCR and adjoining areas and Lucknow on Tuesday evening. In Ghaziabad, police unearthed a small factory in kavinagar area where adulterated kuttu flour was being packed. Police seized 40 bags of flour and arrested 15 labourers from the factory, whose owners managed to flee.