Wholesale price inflation hits a 9-month low of (-) 4.05 per cent in July

The annual rate of inflation, based on the wholesale price index (WPI) stood at (-) 4.05 per cent in July 2015 compared to (-) 2.40 per cent in the previous month as the wholesale price index continued its negative show for the ninth month in a row.

The WPI inflation rate stood at 5.41 per cent during the corresponding month of the previous year.

Build up inflation in the financial year so far stood at 0.80 per cent compared to a build up rate of 2.61 per cent in the corresponding period of the previous year.

The continued deflation in wholesale prices coupled with an eight-month low consumer price inflation at 3.78 per cent in July may prompt RBI to cut the policy rate.

However, food prices, especially those of protein-based items like pulses have galloped by 35.75 per cent in July up from 33.67 per cent in June.

The index for the `primary articles' group, which has a weight of 20.12 per cent in the wholesale price index for all commodities, declined by 0.5 per cent year-on-year in July 2015.

Among primary articles the index for the 'food articles' group declined by 0.6 per cent due to lower price of fruits and vegetables, ragi, jowar, bajra, poultry chicken, egg, fish and pork.

However, the price of urad, masur and arhar, beef and buffalo meat, tea, gram, condiments and spices, wheat, barley, coffee and moong moved up.

The index for 'non-food articles' group declined by 1.3 per cent due to lower price of raw silk, rubber, copra (coconut), guar seed, soyabean, groundnut seed, sunflower seed and flowers, castor seed and raw cotton. However, the price of niger seed, safflower (kardi seed), fodder, rape and mustard seed and raw jute, linseed and coir fibre moved up.

The index for the 'minerals' group rose 3.0 per cent due to higher price of zinc concentrate, crude petroleum, magnesite and chromite. However, the price of sillimanite and copper ore, manganese ore and iron ore declined.

The index for the 'fuel and power' group, which has a weight of 14.91 per cent in WPI, declined by 2.0 per centin July 2015, due to lower price of  furnace oil, aviation turbine fuel, high speed diesel and naphtha and petrol.

The index for the 'manufactured products' group, which has the highest weight of 64.97 per cent in WPI, declined by 0.3 per cent in July 2015.

Among manufactured products, the index for the 'food products' group declined by 0.6 per cent due to lower price of coconut oil, sugar and khandsari, tea dust, tea leaf (blended), palm oil, sunflower oil, rice bran oil, gram powder (besan), powder milk, tea dust (blended), soyabean oil and ghee.

However, the price of tea leaf (unblended), gingelly oil, mustard and rapeseed oil, bakery products, groundnut oil and oil cakes, sooji (rawa) and maida moved up.

The index for the 'beverages, tobacco and tobacco products' group declined by 0.3 per cent due to lower price of  zarda, beer and dried tobacco.

The index for the 'textiles' group rose 0.2 per cent due to higher price of jute sacking cloth, tyre cord fabric, cotton yarn, gunny and hessian cloth, cotton fabric,  manmade fabric and jute sacking bag. However, the price of jute yarn and manmade fibre and woollen textiles declined.

The index for the 'wood and wood products' group rose 0.8 per cent due to higher price of  plywood and fibre board.

The index for the 'paper and paper products' group rose 0.5 per cent due to higher price of laminated paper, newspaper and paper pulp and corrugated sheet boxes. However, the price of paper rolls declined.

The index for the 'leather and leather products' group declined by 0.7 per cent due to lower price of leather and leather footwear. However, the price of leather garments and jackets moved up.

The index for the 'non-metallic mineral Products' group declined by 0.9 per cent due to lower price of grey cement. However, the price of marbles, slag cement, glass bottles and glassware moved up.

The index for the 'basic metals, alloys and metal products' group declined by 1.0 per cent due to lower price of sponge iron and rounds, GP / GC sheets, wire rods, HRC,  silver, plates, gold and gold ornaments and billets and angles, rebars, pencil  ingots, joist and beams, pig iron, steel: pipes and tubes, brass, zinc, CRC and aluminium. However, the price of ferro silicon and nuts / bolts/screw/ washers moved up.

The index for the 'machinery and machine tools' group rose 0.1 per cent due to higher price of ball/roller bearing, industrial  valves, electric motors, rubber machinery,  engines and conductor. However, the price of insulators, plastic machinery, battery dry cells and PVC insulated cable and electrical wires declined.

The index for the 'transport, equipment and parts' group rose 0.1 per cent due to higher price of shafts (all kinds).

The revise WPI inflation figures now stands revised at (-) 2.36 per cent in May after the Central Statistics Office (CSO) revised the index for the month based on the revised data for the month.