Food prices driven by fundamental factors

CHENNAI: Indian food prices, which have been a key contributor to inflation, are being driven by "fundamental", not temporary, factors, central bank Deputy Governor Subir Gokarn said on Thursday.

"It is generally believed that food prices are highly sensitive to monsoon performance, but this belief has been tested over the past few years," Gokarn said.

"I think there is sufficient evidence to suggest that food prices are being driven not by transitory factors such as rainfall but by more fundamental factors," he said.

India's food price index rose 9.13 percent and the fuel price index climbed 12.84 percent in the year to June 11, government data showed on Thursday.

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