In the next three months, due to thin supplies, prices of many foodstuffs such as pulses, sugar, vegetables and poultry products have a high probablity of increase. Analysts suggest that this could fuel inflation and give the central bank little room to cut rates.
"Good monsoon rainfall can lead to higher production, but new crops will be available for consumption only after few months. Until we get the new crop, prices will remain elevated due to limited supplies. " said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives and Commodities.
April consumer price inflation broke a recent slowing trend after food inflation came in at 6.32 percent, compared with 5.21 percent in March. Food prices are a political debate topic in India where more than a quarter of its population of 1.2 billion people live on a mere 74 cents or less per day.