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October’s inflation data point to a welcome softening in price gains that should offer some succour to monetary policy authorities, who have been battling to rein in runaway inflation since the beginning of this year. Retail inflation, or price gains based on the Consumer Price Index, slowed to 6.77% last month, from September’s 7.41%, aided by an appreciable deceleration in food price inflation. The year-on-year inflation based on the Consumer Food Price Index eased by almost 160 basis points in October, to 7.01%, from the preceding month’s 8.60%, helped by a “decline in prices of vegetables, fruits, pulses and oils and fats”, the Government said. Still, a closer look at sequential trends in retail inflation, especially in food items, flag the imperative for policymakers to remain watchful. While year-on-year inflation in vegetable prices slowed sharply to 7.77% last month, from September’s breathless 18% pace, the month-on-month gains accelerated to a four-month high of 4.1% and point to concerns that the supply disruptions caused by unseasonal rains in vegetable-growing regions as well as logistical difficulties posed by monsoon flooding may continue to keep prices volatile, at least in the near term. Prices of staple cereals including rice and wheat also remain an object of concern, notwithstanding the Government’s concerted efforts to cool volatility using export control measures. While inflation in the largest weight in the food basket ticked up to 12.1% in October, from the previous month’s 11.5%, sequentially, price gains came in at 1%, moderating in pace from September. Reports of paddy crops being submerged or affected by heavy rains in different parts of the country coupled with the shortages of wheat and flour that have pushed up their prices all signal more volatility ahead in cereal prices.