Wholesale price inflation tumbles to 4.89% in April

The annual rate of inflation in April 2013, based on the wholesale price index (WPI), declined further by 1.07 percentage points to 4.89 per cent - below Reserve Bank's comfort zone of 5 per cent for the first time in over three years - from the previous three-year low of 5.96 per cent recorded in March.

This compares with the inflation rate of 7.50 per cent during April last and raises hopes of a monetary easing by the Reserve Bank of India at its monetary policy review due in mid-June.

Core inflation rate based on the WPI was also lower at 2.8 per cent in April 2013, compared to 3.5 per cent earlier.

Build-up of inflation rate in the financial year so far was 0.53 per cent compared to a build-up of 1.55 per cent in the corresponding period of the previous year.

However, revised WPI data shows an upward revision in inflation rate for February to 7.28 per cent from 6.8 per cent estimated earlier.

Inflation rate for the primary articles group was lower at 5.75 per cent in April 2013, compared to 9.55 per cent in April last year.

Among the primary articles group, inflation rate for the food articles group saw a sharp moderation to 6.08 per cent from 10.92 per cent earlier. During the month, prices of poultry chicken and egg as also cereals like barley, jowar, ragi, wheat and gram declined while prices of fruits and vegetables, masur and fish, condiments and spices, urad and tea increased.

The inflation rate for 'non-food articles' group stood at 1.4 per cent due to higher price of flowers, soyabean, groundnut seed and raw silk, fodder and copra, coir fibre, cotton seed, sunflower and mesta.

However, the price of guar seed and linseed, raw rubber and raw cotton, castor seed, rape and mustard seed and gingelly seed declined.

The inflation rate for the 'minerals' group was at a negative  (-) 0.7 per cent due to lower price of sillimanite and crude petroleum. However, the price of magnesite, steatite and copper ore and barytes moved up.

Manufactured products inflation too saw moderation to 3.41 per cent in April 2013 from 5.27 per cent in same month last year.

Among manufactured products, the index for the 'food products' group rose 0.5 per cent due to higher price of processed prawn, tea leaf (unblended), oil cakes, gur and tea dust (unblended), mixed spices and groundnut oil, cotton seed oil, sunflower oil and gola (cattle feed).  However, the price of coffee powder, maida, khandsari, soyabean oil, canned fish and mustard and rapeseed oil declined.

The index for the 'beverages, tobacco and tobacco products' group rose by 1.7 per cent due to higher prices of cigarette and dried tobacco.

The index for the 'textiles' group rose 0.7 per cent due to higher prices of cotton yarn, gunny and hessian cloth and woollen textiles.

The index for the 'wood and wood products' group rose 0.3 per cent due to higher price of plywood and fibre board.

The index for the 'leather and leather products' group rose 0.6 per cent due to higher price of leather garments and jackets and leather footwear.

The index for the 'rubber and plastic products' group rose 0.1 per cent due to higher price of plastic/LDPE/polythene bags and tooth brush.

The index for the 'chemicals and chemical products' group rose 0.2 per cent due to higher price of synthetic resin, agarbattis and vaccines. However, the price of pesticides and ammonium sulphate and hair / body oils declined.

The index for the `minerals'  group declined by 0.7 per cent due to lower price of sillimanite and crude petroleum. However, the price of magnesite, steatite and copper ore and barytes moved up.

Inflation rate for the fuel and power category was lower at 8.84 per cent in April 2013, compared with 12.10 per cent in April last year.

The index for the `fuel and power' group declined by 0.7 per cent due to lower prices of aviation turbine fuel, petrol and furnace oil and LPG. However, the price of bitumen moved up.

The index for the 'non-metallic mineral products' group declined by 0.7 per cent due to lower price of marbles and glass bottles and bottleware. However, the price of white cement moved up.

The index for the 'basic metals, alloys and metal products' group declined by 0.3 per cent due to lower price of silver and lead, gold and gold ornaments and slab, CRC, zinc, rounds, wire rods, melting scrap and iron castings. However, the price of ferro chrome and iron and steel wires, steel castings, pipes/tubes/rods/strips, ferro manganese, pencil ingots and sponge iron moved up.

The index for the 'machinery and machine tools' group rose 0.1 per cent due to higher prices of fibre optic cable, electric switches and PVC insulated cable, grinding /wet coffee machinery, hydraulic equipment, batteries and harvester. However, the price of lamps, UPS / stabiliser and pump and assembly, TV sets, electric generators and boiler and accessories declined.

The index for the 'transport, equipment and parts' group rose 0.1 per cent due to higher price of trolleys/tankers.

The annual rate of inflation based on final index for February 2013 stood at 7.28 per cent against the 6.84 per cent estimated previously as the revised WPI for all commodities (Base: 2004-05=100) stood at 170.9 compared to 170.2 (provisional) estimated earlier.