High food and fuel prices push up WPI inflation rate to 6.84 per cent in February

India's wholesale price-based inflation rate breached a four-month declining trend and rose marginally to 6.84 per cent in February, as food and fuel prices continued to rise.
 
The annual rate of inflation, based on the wholesale price index (WPI) rose 6.84 per cent year-on-year in February 2013, up from 6.62 per cent in the previous month.

The WPI inflation rate stood at 7.56 per cent during the corresponding month of the previous year.

Build-up of inflation so far during the financial year (beginning April 2012) was 5.71 per cent, against a build-up of 6.56 per cent in the corresponding period of the previous year.

The upward movement in inflation rate could dampen the Reserve Bank's enthusiasm to ease interest rate to support economic growth.

Ahead of the monetary policy review slated for 19 March, RBI governor D Subbarao, yesterday, also hinted that an inflation reading of above 6 per cent demands tightening of monetary policy stance.

Obviously, the current trend in inflation is much above the RBI's comfort level of around 5 per cent.

The index for the `primary articles' group rose 0.6 per cent with the prices of non-food articles rose 1.6 per cent.

The index for the food articles group rose 0.2 per cent due to an 8 per cent increase in the prices of masur dal, a 7-per cent increase in ragi prices, a 6-per cent rise in prices of poultry chicken, a 4-per cent increase in prices of fish (inland), a three-per cent increase in jowar prices, a 2-per cent increase in prices of urad, condiments and spices, barley, fish (marine), arhar and rice and a one per cent increase in the prices of egg, mutton, maize and wheat.

However, the prices of gram, coffee, fruits and vegetables and tea rose by 7 per cent, 6 per cent and 2 per cent, respectively, during February 2013.

The index for the 'non-food articles' group rose 1.6 per cent due to a 20-per cent increase in the prices of flowers, 9 per cent increase in raw jute prices, 7 per cent increase in the prices of fodder, 6 per cent rise in guar seed prices, 5 per cent increase in mesta prices, 4 per cent increase in raw cotton prices, 3 per cent increase in prices of logs and timber, 2 per cent increase in prices of groundnut seed and a 1 per cent rise in soyabean prices.

However, the prices of rapeseed and mustard seed, raw silk, copra, castor seed and raw rubber, sunflower, gingelly seed and cotton seed and coir fibre declined by 6 per cent, 5 per cent, 3 per cent, 2 per cent and 1 per cent, respectively.

The index for the 'minerals' group rose 0.9 per cent due to a 14 per cent increase in the prices of copper ore, an 11 per cent increase in prices of barites, a 7 per cent increase in prices of magnesite and steatite, a 5 per cent increase in the prices of zinc concentrate and dolomite and a 2 per cent increase in crude petroleum prices.

However, the prices of iron ore declined by 5 per cent.

The index for the 'fuel and power' group rose 3.0 per cent due to a 21 per cent increase in the prices of cooking gas (LPG) a 7 per cent increase in prices of furnace oil, a 5 per cent rise in prices of lubricants, a 4 per cent increase in the prices of high speed diesel, a 3 per cent increase in prices of light diesel oil and bitumen, a 2 per cent increase in prices of petrol and aviation turbine fuel and a 1 per cent rise in kerosene prices.

However, the index for the `manufacturing product' group, which has the highest weight of 64.97 per cent in the WPI basket, declined by 0.1 per cent.

Among manufactured products, the index for the 'food products' group declined by 0.1 per cent due to 7 per cent decline in prices of cotton seed oil, 5 per cent fall in prices of canned fish, 4 per cent decline in prices of bakery products, 2 per cent fall in the prices of tea leaf (blended), 2 per cent decline in prices of groundnut oil and mixed spices and a fall in the prices of oil cakes, sugar, rice bran oil and mustard and rapeseed oil by 1 per cent each.

However, the prices of tea leaf (unblended) rose 14 per cent, prices of tea dust (unblended) and gola (cattle feed) increased by 6 per cent each, sooji (rawa) prices rose 5 per cent, palm oil and gingelly oil prices rose 2 per cent each and sunflower oil, sugar confectionary, copra oil, gur and soyabean oil all moved up by 1 per cent each.

The index for the 'beverages, tobacco and tobacco products' group rose 1.0 per cent due to an 11 per cent increase in the prices of dried tobacco and a 1 per cent increase in the prices of rectified spirit, soft drinks and carbonated water and India-made foreign liquor (blended).

The index for the 'textiles' group declined by 0.2 per cent due to a 2 per cent decline in the prices of woollen textiles and a 1 per cent fall in the prices of man made fabrics.

However, the prices of cotton yarn, jute sacking bag, gunny and hessian cloth, jute yarn, man-made fibre and tyre cord fabric moved up by 1 per cent each.

The index for the 'wood and wood products' group declined by 0.4 per cent due to a 1 per cent decline in the prices of plywood and fibre board.

The index for the 'paper and paper products' group rose 0.4 per cent due to a 1 per cent increase in the prices of paper rolls, cream-laid woven paper, paper cartons / boxes, paper for printing / poster, map litho paper and laminated paper.

However, the prices of paper pulp declined by 8 per cent.

The index for the 'leather and leather products' group declined by 1.4 per cent due to a 3 per cent decline in the prices of leather footwear.

The index for the 'rubber and plastic products' group rose 0.5 per cent due to a 1 per cent increase in the prices of plastic products.

However, the prices of tyres declined by 1 per cent.

The index for the 'non-metallic mineral products' group rose 0.9 per cent due to a 1 per cent increase in the prices of grey cement, bricks and tiles and glass bottles and bottleware.

However, the prices of slag cement declined by 3 per cent while polished granite, white cement, marbles and lime  were cheaper by 1 per cent each.

The index for the 'basic metals, alloys and metal products' group declined by 0.6 per cent as steel structures turned cheaper by 10 per cent, pencil ingot prices fell 7 per cent, iron castings and pig iron prices fell 3 per cent each, prices of sponge iron, gold and gold ornaments, silver and billets declined by 2 per cent each and ferro chrome, metal containers, rounds, zinc, iron and steel wire and wire rods turned cheaper by 1 per cent each.

However, the prices of melting scrap increased by 8 per cent while prices of steel castings and copper wire (all types) increased by 4 per cent each, sheet prices rose 3 per cent and pressure cooker, CRC, brass and angles were costlier by 1 per cent each.

The index for the 'machinery and machine tools' group rose 0.2 per cent due to a 4 per cent increase in the prices of pump and assembly, a 3 per cent increase in the prices of material handling equipment, a 2 per cent rise in the prices of electric lamps and a 1 per cent increase in the prices of air-conditioners and refrigerators, textile machinery, control equipments and electric motor starters.

However, the prices of ball/roller bearing declined by 3 per cent while hydraulic equipment were cheaper by 2 per cent,

Based on the revised WPI data for December, the CSO has revised the final WPI inflation rate to 7.31 per cent from the 7.18 per cent reported on 14 January 2013.