Wholesale price inflation dips to record (-) 2.65% in April

Wholesale prices in India continued to be under deflationary pressure for the sixth month in a row with the wholesale price index dropping to a new low of (-) 2.65 per cent in April, on the back of low prices of fuel and manufactured items even as food prices increased.

The annual rate of inflation based on WPI (with base 2004-05 = 100) stood at (-) 2.65 per cent in April 2015 compared to (-) 2.33 per cent in the previous month, provisional estimates released by the Central Statistics Office (CSO) showed.

WPI stood at 5.55 per cent in April last year.

Build-up of inflation in the financial year so far was (-) 0.06 per cent compared to a build-up of 0.28 per cent in the corresponding period of the previous year.

Markets expect the deflationary trend to prompt a rate cut by the Reserve Bank of India, as both retail and wholesale inflation are under check now.

On the other hand, industrial output had slowed to a 5-month low of 2.1 per cent in March.

The index for the `primary articles' group, which has a weight of 20.12 per cent in the wholesale price index, rose 0.9 per cent in April 2015.

Among primary articles, the index for the 'food articles' group rose 1.3 per cent due to higher prices of fruits and vegetables, gram, tea, poultry chicken, urad, arhar, ragi, fish, bajra and jowar. However, the price of barley, egg, mutton, beef, buffalo meat, pork, masur, coffee and maize declined.

The index for the 'non-food articles' group rose 0.6 per cent due to higher prices of guar seed and raw cotton, groundnut seed, cotton seed, safflower (kardi seed) and niger seed, raw silk, mesta, soyabean, castor seed, coir fibre and rape and mustard seed. However, the price of flowers, gingelly seed, raw rubber, fodder and linseed and copra (coconut) declined.

The index for the 'minerals' group declined by 2.2 per cent due to lower prices of manganese ore, iron ore, copper ore, barites, magnesite and chromite. However, the price of zinc concentrate, crude petroleum, sillimanite and phosphorite moved up.

The index for the `fuel and power' group (weight of 14.91 per cent in the WPI) declined by 1.7 per cent due to lower prices of furnace oil, petrol  and high speed diesel, aviation turbine fuel and electricity.

The index for the `manufactured products' group (weight of 64.97 per cent in WPI) declined by 0.1 per cent.

Among manufactured products, the index for the 'food products' group declined by 0.2 per cent due to lower prices of processed prawn, vanaspati and tea leaf, wheat flour, sugar, sooji, gingelly oil, maida, oil cakes and ghee.

However, the prices of tea (dust and leaf), salt, canned fish, bakery products and sugar confectionary, groundnut oil, copra oil and mixed spices moved up.

The index for the 'beverages, tobacco and tobacco products' group rose 0.1 per cent due to higher prices of dried tobacco. However, the price of rectified spirit declined.

The index for the 'textiles' group rose 0.3 per cent due to higher prices of manmade fibre, jute sacking cloth, jute sacking bag and jute yarn. However, the prices of tyre cord fabric and cotton yarn and cotton fabric declined.

The index for the 'wood and wood products' group rose 1.6 per cent due to higher prices of plywood and fibre board and timber / wooden planks and processed wood.

The index for the 'paper and paper products' group rose 0.3 per cent due to higher prices of newspaper and books/periodicals/journals. However, the price of kraft paper and bags, laminated paper and newsprint declined.

The index for the 'leather and leather products' group declined by 0.1 per cent due to lower prices of leather chappals/sandals and leather gloves.

The index for the 'rubber and plastic products' group declined by 0.2 per cent due to lower price of tubes.

The index for the 'chemicals and chemical products' group declined by 0.1 per cent due to lower prices of synthetic resin, hair / body oils, polymers, castor oil, adhesive and  gum, turpentine oil and pesticides.

However, the prices of rubber chemicals and photographic goods, vitamins, pigment and pigment intermediates, explosives and non-cyclic compound moved up.

The index for the 'non-metallic mineral products' group declined by 0.2 per cent due to lower prices of grey cement and polished granite. However, the prices of marbles and bricks and tiles and railway sleeper moved up.

The index for the 'basic metals, alloys and metal products' group declined by 0.2 per cent due to lower prices of ferro manganese, steel rods and sheets, ferro silicon, copper / copper ingots, CRC, ferro chrome, steel pipes and tubes, brass, rebars, GP/GC sheets, HRC, joist and beams and silver.

However, the prices of zinc, melting scrap and steel structures, pencil ingots, rounds, wire rods, plates and billets moved up.

The index for the 'machinery and machine tools' group declined by 0.3 per cent due to lower prices of PVC insulated cable, electrical pumps, transformers and communication equipment.

However, the price of sprinkler, capacitors, engines, dry battery cells and industrial furnaces moved up.

The index for the 'transport, equipment and parts' group rose 0.4 per cent due to higher prices of motor cycles/scooters/mopeds.

The CSO has now estimates the inflation figure for February to be (-) 2.17 per cent, based on the revised data, against the earlier estimated (-) 2.06 per cent.