Indian food price inflation rises to 20%

Indian food prices surged an annual 20 per cent in early December as supply shortages hit, heightening expectations the central bank is set to tighten policy to curb inflation.

Food prices are jumping because of shortages after crops were hit by the weakest monsoon rains in 37 years and then flooding in parts of the country, but the price rises come as the economy is picking up strength after a dip in late 2008 and early 2009.

Food prices rose 19.95 per cent in the year to Dec 5, picking up from an annual 19.05 per cent rise a week earlier, weekly data showed on Thursday.

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