India’s wholesale price inflation slows to 3.74% in August

Wholesale price inflation in the country based on the wholesale price index (WPI) rose at a slower-than-expected pace of 3.74 per cent in August 2016, compared with its year=ago level helped in large measure by smaller increases in food prices, official figures released today showed.

This compares with a negative inflation of (-) 5.06 per cent during the corresponding month of the previous year and a 3.55 per cent rise in prices in July, provisional estimates showed.

Build-up of inflation so far in the financial year was 4.45 per cent compared to a build up rate of 0.23 per cent in the corresponding period of the previous year.

Wholesale prices of food rose 8.23 per cent year-on-year in August, compared with a provisional 11.82 per cent gain in July.

Inflation rate for the `primary articles' group, which has a weight of 20.12 per cent in the wholesale price index, declined by 0.2 per cent in August.

Among primary articles, inflation rate for the 'food articles' group declined by 0.6 per cent due to lower prices of poultry chicken and egg, urad, moong, arhar, masur, fruits and vegetables,  tea and maize. However, the price of gram, mutton, condiments and spices, fish, wheat, barley and coffee moved up.

Inflation rate for the 'non-food articles' group declined by 0.1 per cent in August 2016 due to lower prices of hides (raw), raw jute, fodder, mesta, raw rubber and niger seed, soyabean and cotton seed, sunflower,  skins(raw) and coir fibre. However, the prices of      flowers, gingelly seed, copra (coconut), guar seed, linseed and rape and mustard seed, castor seed and safflower (kardi seed), raw cotton, groundnut seed and raw wool moved up.

Inflation rate for the 'minerals' group rose 3.5 per cent in August due to higher prices of copper ore, sillimanite, crude petroleum and phosphorite, iron ore and limestone. However, the prices of manganese ore and zinc concentrate declined.

The index for the `fuel and power' group, which has a weight of 14.91 per cent in the WPI, declined by 3.0 per cent due to lower prices of  high speed diesel, aviation turbine fuel, petrol and furnace oil, LPG, kerosene, and bitumen.

Inflation rate for the `manufactured group', which has a weight of 64.97 per cent in the WPI, rose 0.2 per cent in August 2016.

Among manufactured products, inflation rate for the 'food products' group rose 1.1 per cent in August due to higher price of gram powder (besan),  gur, tea leaf (blended), gingelly oil, oil cakes, sugar, groundnut oil, mustard and rapeseed oil, cotton seed oil, copra oil, khandsari, tea dust, processed prawn, gola (cattle feed) and palm oil. However, the price of tea leaf (unblended) and sugar confectionary  declined.

Inflation rate for the 'beverages, tobacco and tobacco products' group rose 0.5 per cent in August 2016 due to higher prices of cigarette and chewing tobacco,soft drinks and carbonated water and rectified spirit. However, the price of IMFL (blended) and dried tobacco declined.

Inflation rate for the 'textiles' group rose 0.4 per cent in August 2016 due to higher prices of  jute sacking bag and jute sacking cloth, cotton yarn and manmade fibre. However, the price of gunny and hessian cloth declined.

Inflation rate for the 'wood and wood products' group rose 0.8 per cent in August 2016 due to higher prices of  processed wood and timber / wooden planks.

Inflation rate for the 'paper and paper products' group rose 0.2 per cent in August 2016 due to higher prices of newspaper, corrugated sheet boxes and books/ periodicals/ journals.  However, the price of newsprint and printing and writing paper and laminated paper declined.

Inflation rate for the 'leather and leather products' group declined by 0.1 per cent in August 2016 due to lower price of leather.

Inflation rate for the 'rubber and plastic products' group rose 0.8 per cent in August 2016  due to higher prices of rubber products and tubes.

Inflation rate for the 'chemicals and chemical products' group rose 0.1 per cent due to higher prices of lacquer and varnishes, antacid and digestive preparations, synthetic resin and basic inorganic chemicals, However, the price of rubber chemicals declined.

Inflation rate for the 'non-metallic mineral products' group rose 0.5 per cent in August 2016 due to higher prices of white cement, marbles, glass bottles and bottleware, bricks and tiles and grey cement.

Inflation rate for the 'basic metals, alloys and metal products' group declined by 0.7 per cent in August 2016 due to lower price of rounds, angles and GP/CG sheets, wire rods and     joist and beams, rebars, ferro manganese, HRC, steel castings and plates, steel rods, pig iron,   sponge iron, pencil  ingots, steel: pipes and tubes, melting scrap and pipes/tubes/rods/strips. However, the price of silver, gold and gold ornaments and steel, iron and steel wires and CRC moved up.

Inflation rate for 'transport, equipment and parts' group rose 0.1 per cent in August 2016 due to higher prices of engine assembly andchassis.

The final inflation rate for of June 2016 has been revised to 2.12 per cent based on the revised wholesale price index for 'all commodities' against 1.62 per cent estimated earlier.