WPI inflation hits a 2-month low of 5.20% as food prices ease

The annual rate of inflation based on the wholesale price index (WPI) declined to hit a two-month low of 5.20 per cent in April 2014, down from 5.70 per cent in the previous month, amidst a general decline in food prices.

Wholesale price inflation stood at 4.77 per cent during the corresponding month of the previous year.

Build-up of inflation so far during the financial was 0.22 per cent compared to a build-up of 0.71 per cent in the corresponding period of the previous year.

Inflation based on the consumer price index, on the other hand, had shot up to a three-month high of 8.59 per cent in April and the WPI show is unlikely to have any impact on RBI's policy decisions.

The Reserve Bank of India, which is set to announce its bimonthly monetary policy next month, will considers both the inflation data along with other economic indicators while deciding monetary policy.

The index for the `primary articles' group, which has a weight of 20.12 per cent in the WPI rose 1.0 per cent from the previous month.

Among primary articles, the index for the 'food articles' group rose 1.5 per cent due to higher prices of tea, fruits and vegetables and poultry chicken, masur and moong, pork, ragi, jowar, rice, mutton, bajra and condiments and spices. However, the price of egg, fish (fresh-water), barley, wheat and fish (marine) and maize declined.

The index for the 'non-food articles' group declined by 0.4 per cent due to lower prices of fodder, raw rubber, raw silk, castor seed, raw cotton and flowers and rape and mustard seed, guar seed, cotton seed and sunflower.

However, the price of copra (coconut), niger seed and raw jute, soyabean and groundnut seed and logs and timber moved up.

The index for the 'minerals' group declined marginally due to lower price of copper ore, magnesite and chromite. However, the prices of zinc concentrate, barytes, sillimanite, iron ore and manganese ore, steatite and crude petroleum moved up.

The index for the `fuel and power' group (weight of 14.91 per cent) declined by 1.0 per cent due to lower prices of aviation turbine fuel and furnace oil, LPG and petrol and kerosene and bitumen.

Manufactured products (weight 64.97%)

The index for the `manufacturing products' group, which has a the highest weight of 64.97 per cent in the WPI, rose marginally by 0.2 per cent due to higher prices of tea, refined edible oils, etc.

Within manufactured products, the index for the 'food products' group rose 0.8 per cent due to higher price of gingelly oil, gola (cattle feed), sugar and bakery products, vanaspati, gur and wheat flour (atta) and oil cakes, khandsari, palm oil, sugar confectionary and ghee.

However, the price of processed prawn, tea dust (unblended), groundnut oil, mustard and rapeseed oil and tea leaf (unblended), rice bran oil and mixed spices, copra oil, soyabean oil and cotton seed oil declined.

The index for the 'beverages, tobacco and tobacco products' group rose by 0.4 per cent due to higher price of zarda, cigarette and bidi. However, the prices of dried tobacco and soft drinks and carbonated water declined.

The index for the 'textiles' group rose by 0.9 per cent due to higher prices of jute yarn, cotton yarn, gunny and hessian cloth and tyre cord fabric, jute sacking bag and manmade fibre. However, the prices of woollen textiles declined by 1 per cent.

The index for the 'wood and wood products' group rose 0.4 per cent due to higher prices of plywood and fibre board.

The index for the `paper and paper products' group rose 0.1 per cent due to higher price of newspaper and laminated paper and paper for printing / poster.

The index for the 'leather and leather products' group declined by 0.5 per cent due to lower prices of leather garments and jackets and leather.

The index for the 'rubber and plastic products' group rose 0.1 per cent month due to higher price of HDPE woven fabric, rubber transmission belt, plastic films and sheets and plastic / PVC pipe and plastic / LDPE / polythene bags. However, the prices of football, plastic PVC chappals and plastic bottles, polythene / PVC foam and HDPE bag declined.

The index for the 'chemicals and chemical products' group rose 0.8 per cent due to higher price of polymers and dye and dye intermediates, synthetic resin, castor oil, ammonium sulphate, organic manure, basic organic chemicals and pesticides and basic inorganic chemicals, paints, pigment and pigment intermediates and vitamins.

However, the price of non-cyclic compound, adhesive and gum declined by a marginal 1 per cent.

The index for the 'non-metallic mineral products' group rose by 0.4 per cent in the previous month due to higher price of polished granite and railway sleeper and bricks and tiles, However, the price of marbles declined.

The index for the 'basic metals, alloys and metal products' group declined by 1.3 per cent in the previous month due to lower price of billets, plates, silver, steel castings, angles and joist and beams, CRC, rebars, rounds, gold and gold ornaments and HRC and copper / copper ingots, nuts / bolts / screw / washers, pressure cooker, ferro chrome, GP / GC sheets and metal containers each.  However, the price of melting scrap and steel rods, steel pipes & tubes, steel structures and pencil ingots moved up.

The index for the 'machinery and machine tools' group rose 0.2 per cent due to higher price of fibre optic cable, loader, industrial  valves, machine tools and communication equipment and air conditioner and refrigerators.  However, the price of washing / laundry machines, IV sets and electric generators and magnets declined.

The index for the 'transport, equipment and parts' group declined by 0.1 per cent due to lower price of geared motor, steering gears and suspension and lamp. However, the price of tractors moved up.

The annual rate of inflation for February 2014 stood at 5.03 per cent against 4.68 per cent reported earlier after the final wholesale price index has been revised on the basis of updated figures.