WPI inflation edges up to 0.79% in May as food prices spike

The annual rate of inflation based on the wholesale price index (WPI) for May 2016 edged up to 0.79 per cent from 0.34 per cent in April, keeping inflation in positive territory for a second straight month, official data released today showed.

The spike in WPI could be largely attributed to higher prices of food articles which increased food inflation to 7.88 per cent in May, much higher than 4.23 per cent in April.

WPI inflation had contracted 2.2 per cent in May last year.

Build-up of inflation rate in the financial year so far (April-May 2016) was 2.34 per cent compared to a build-up rate of 1.08 per cent in the corresponding period of the previous year.

There has been a steady rise in both consumer price inflation and wholesale price inflation in recent times, which points to a firming of prices.

Inflation rate for the primary articles group, which has a weight of 20.12 per cent in the WPI, rose 2.4 per cent year-on-year in May 2016.

Inflation rate for the 'food articles' group rose by 2.8 per cent to due to higher prices of fruits and vegetables, urad, gram, masur, moong, arhar, barley, bajra, maize, jowar, rice, ragi egg, mutton, fish, poultry, condiments and spices and tea. However, the prices of coffee fish (marine), pork, beef and buffalo meat declined.

Inflation rate for 'non-food articles'  group rose 0.4 per cent due to higher prices of linseed,  gingelly seed, safflower (kardi seed), rape and mustard seed, raw cotton, raw wool, groundnut seed, raw jute, mesta and cotton seed. However, the prices of flowers, sunflower, niger seed, fodder and copra (coconut), soyabean and raw silk declined.

Inflation rate for the 'minerals' group rose 3.7 per cent due to higher prices of sillimanite, iron ore, crude petroleum and copper ore. However, the prices of zinc concentrate, magnesite, chromite, manganese ore and phosphorite declined.

Inflation rate for the `fuel and power' group (weight of 14.91 per cent in WPI) rose 2.8 per cent due to higher prices of furnace oil, high speed diesel, kerosene, aviation turbine fuel, petrol and bitumen.

Inflation rate for the `manufactured products' group (weight of 64.97 per cent in WPI) rose 0.5 per cent in May 2016.

Among manufactured products, inflation rate for the 'food products' group rose 1.0 per cent due to higher prices of tea leaf (blended), sugar confectionary, coffee powder, processed prawn and gur, tea dust (blended), sugar and gingelly oil, groundnut oil, khandsari, ghee, mixed spices, palm oil, gola (cattle feed), powder milk and sooji (rawa ). However, the prices of tea dust (unblended), gram powder (besan), cotton seed oil and copra oil, mustard and rapeseed oil and tea leaf (unblended) declined.

Inflation rate for the 'beverages, tobacco and tobacco products' group rose 1.3 per cent due to higher prices of beer, soft drinks and carbonated water and zarda.

Inflation rate for the 'textiles' group rose 0.5 per cent due to higher prices of jute sacking bag, gunny and hessian cloth, cotton yarn and cotton fabric.

Inflation rate for the 'wood and wood products' group declined by 0.5 per cent due to lower prices of timber / wooden planks.

Inflation rate for the 'rubber and plastic products' group rose 0.2 per cent due to higher price of tubes.

Inflation rate for the 'chemicals and chemical products' group rose 0.1 per cent due to higher prices of non-cyclic compound and turpentine oil. However, the prices of antacid and digestive preparations, hair / body oils and adhesive and gum declined.

Inflation rate for the 'non-metallic mineral products' group declined by 0.3 per cent due to lower prices of polished granite, railway sleepers and grey cement. However, the prices of marbles and asbestos corrugated sheet and lime moved up.

Inflation rate for the 'basic metals, alloys and metal products' group rose 0.6 per cent due to higher prices of wire rods, steel rods and ferro manganese, pig iron, plates and rounds, silver billets, ferro chrome, HRC, pipes, tubes, rods, strips and steel pipes and tubes, CRC, pressure cooker, angles, melting scrap and aluminium. However, the prices of steel structures and steel castings declined.

Inflation rate for the 'machinery and machine tools' group rose 0.4 per cent due to higher prices of washing / laundry machines, ball/roller bearing and transformer, electronic PCB /micro circuit and heat exchanger and fibre optic cable. However, the price of textile machinery and lifts, conductor, insulators, electrical pumps and fluorescent tubes declined.

Inflation rate for the 'transport, equipment and parts' group rose 0.1 per cent due to higher prices of railway axle and wheel.

Final inflation rate for March 2016 based on the revised wholesale price index stood at -0.45 per cent against -0.85 per cent (provisional) reported earlier.