NEW DELHI (Commodity Online) : On the background of Meteorological department’s declaration of 2009 as a drought year, the RBI said food prices this year are likely to go up because of the erratic monsoon.

Speaking to reporters here RBI deputy governor KC Chakrabarty said “the expectation is that the erratic monsoon may put pressure on inflation”.

Trade commodities or equities from across the globe. Join Now

When asked whether farm loans would be rescheduled because of the uncertain monsoon this year, he said that is an issue for next year.

According to reports, rainfall in the country between June one and August 12 has been 29 percent below normal.

The deficient rainfall has led to reduction in Kharif sowing, fuelling fears of high food prices in the coming months.

However, inflation for the week ended August 1 dipped to (-) 1.74 percent, the lowest in three decades, even as prices of essential food items like pulses, cereals, and fruit and vegetables continued to rise.

During the week, the prices of cereals surged by 12 percent, pulses by 18 percent, and fruit and vegetables by 18.4 percent annually.