CPI expected to show rise

Increase attributed to the continuing rapid rise in food prices due to higher prices for agricultural commodities.

By ADRIAN FILUT
Most capital market analysts believe that the Consumer Price Index (CPI), which will be published today, rose by 0.3 percent in October 2010.
They attribute the increase to the continuing rapid rise in food prices, even with seasonal factors taken into account, due to higher prices for agricultural commodities.
Prices for baked goods are also estimated to have increased sharply, because of the rise in the price of wheat. One forecaster predicted higher prices for other items due to rising commodities prices, especially corn for feedstock.
The housing item (rent) in the CPI continues to function as a primary inflation driver. This item is forecasted to have risen 0.5% in October, and analysts believe that this rate of increase will continue.
Clothing and footwear also contributed to the rise in the CPI, albeit less than usual, due to seasonal factors, such as discounts by large retailers on winter collections because of the prolonged hot summer.
Conversely, capital market analysts predicted a 0.5% drop in fresh fruit and vegetable prices, even though tomato prices have not fallen to their levels before the heat wave.
Lower tomato prices will also be seen in the CPI for November. Meanwhile, prices for other vegetables, such as cucumbers and cabbage, have already fallen back to their levels of two months ago.