Wholesale price inflation spurts to 6.01% in May

The annual rate of inflation based on the wholesale price index (WPI) moved higher to 6.01 per cent in May, from 5.2 per cent reported in the previous month. It is also higher than the WPI-based inflation level of 4.58 per cent recorded in May 2013.

Build-up of inflation so far during the current financial year stood at 0.78 per cent compared to a build-up rate of 0.76 per cent in the corresponding period of the previous year.

The WPI-based inflation for March 2014 has now been revised to 6 per cent from 5.7 per cent forecast earlier.

This leaves little elbowroom for the Reserve Bank of India (RBI), even though it has moved has moved away from anchoring monetary policy on WPI-based inflation to consumer price index (CPI) inflation.

The index for the `primary articles' group, which has a weight of 201.12 per cent in the wholesale price index, rose 1.8 per cent in May 2014.

Among primary articles, the index for the 'food articles' group rose 2.3 per cent in May 2014 on the back of higher price of coffee, poultry chicken, fish, tea and fruits and vegetables, condiments and spices, urad and masur, moong, rice, barley, arhar, milk, pork and mutton. However, the price of maize, wheat and ragi and egg, jowar and gram declined.

The index for the 'non-food articles' group rose 1.2 per cent in May 2014 due to higher price of  guar seed, soyabean, copra (coconut), tobacco, raw jute, raw silk, mesta and groundnut seed, raw cotton and cotton seed. However, the prices of gingelly seed and flowers, fodder and linseed, castor seed and sunflower declined.

The index for the 'minerals' group declined by 0.7 per cent in May 2014 due to lower price of steatite and zinc concentrate, iron ore and chromite and crude petroleum. However, the price of copper ore and barytes moved up.

The index for the `fuel and power' group, which has a weight of 14.91 per cent in the WPI, rose 0.5 per cent due to higher price of electricity and light and high speed diesel. However, the price of furnace oil and aviation turbine fuel, LPG and petrol declined.

The index for the `manufactured products' group, which has a weight of 64.97 per cent in the WPI, rose 0.5 per cent in May 2014.

Among manufacture products, the index for the 'food products' group rose 0.5 per cent due to higher price of tea leaf (unblended), tea leaf (blended), gur and bakery products, gola (cattle feed) and processed prawn, copra oil and ghee and mixed spices, khandsari and oil cakes. However, the price of tea dust (unblended), groundnut oil and gingelly oil and soyabean oil and sunflower oil declined.

The index for the 'beverages, tobacco and tobacco products' group rose 0.9 per cent due to higher price of dried tobacco and cigarette.

The index for the 'textiles' group rose 0.1 per cent due to higher price of man-made fabric, jute sacking cloth, jute sacking bag and cotton fabric. However, the price of jute yarn and tyrecord fabric and gunny and hessian cloth declined.

The index for the 'wood and wood products' group rose 2.4 per cent due to higher price of timber / wooden planks and plywood and fibre board.

The index for the 'paper and paper products' group rose 2.2 per cent due to higher price of paper for newsprint, printing and writing paper, card board and paper for books/ periodicals/ journals, kraft and bags, maplitho paper and paper rolls. However, the price of cream laid woven paper declined.

The index for the 'leather and leather products' group declined 0.3 per cent due to lower price of leather garments and jackets.

The index for the 'rubber and plastic products' group rose 0.5 per cent due to higher price of rubber products and plastic products.

The index for the 'chemicals and chemical products' group rose 0.4 per cent due to higher price of hair / body oils, turpentine oil and ammonium sulphate, dye and dye intermediates and antibiotics, basic organic chemicals, basic inorganic chemicals and pesticides. However, the price of non-cyclic compound, pigment and pigment intermediates and washing soap declined.

The index for the 'non-metallic mineral products' group declined 0.1 per cent due to lower price of polished granite, grey cement and railway sleeper. However, the price of marbles moved up.

The index for the 'basic metals, alloys and metal products' group rose 0.9 per cent due to higher price of zinc, melting scrap and fixtures, sheets and steel castings, billets and pig iron and rebars, wire rods, pencil  ingots, CRC, steel structures, furniture, plates, iron castings, sponge iron, GP/GC sheets, angles, HRC, metal containers and steel rods. However, the price of ferro manganese, pressure cooker and copper / copper ingots, ferro silicon, brass and iron and steel wire declined.

The index for the 'machinery and machine tools' group rose 0.2 per cent due to higher price of fibre optic cable, battery dry cells, regulators, electric motor starters, communication equipments and lifts, pump and assembly, insulators and electric motors and thresher and machine tools. However, the price of      ball/roller bearing and grinding /wet coffee machinery declined.

The index for the 'transport, equipment and parts' group rose 0.1 per cent due to higher price of slider, geared motor and fuel injection equipment and piston and compressor. However, the price of shafts (all kinds) declined.

The final WPI inflation rate for March has now been revised to 6 per cent from 5.7 per cent estimated earlier, on the basis of the revised WPI index for all commodities.