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Page last updated at 06:56 GMT, Friday, 18 December 2009

India food prices hit 10-year high

Watermelons at a wholesale fruit market in India
India is grappling with rising food prices

Food prices in India have risen to a high of nearly 20% over last year, the highest rate in a decade.

The federal finance minister Pranab Mukherjee has said the government was planning to import food to ease prices.

A short supply of food due to lower farm produce following drought and floods has led to the rising prices.

Overall inflation in India has risen to 4.78% in November, up from 1.34% in October. Economists say this could trigger a rise in interest rates.

Correspondents say that the price rises are bound to increase concerns that poorer people in the country may be more exposed to food shortages and malnourishment.

Finance minister Pranab Mukherjee said that the food prices were an "area of concern."

"We have to take appropriate measures to see what best could be done by augmenting the supply through imports," he was quoted as saying by the Press Trust of India news agency.

Reports say that despite easing of import restrictions to bolster food supplies, food inflation had soared to nearly 20%.

The prices of pulses, milk, wheat and rice - and vegetables like potatoes - have risen sharply.

Potato prices have gone up by 136% and pulses have risen by over 40% over last year.

Senior government officials have said that overall inflation in India could be close to 7% by end of March next year.



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