WPI inflation stays negative for the 8th month as consumer prices spurt

It can happen only in India - the wholesale prices continue to go down while retail prices continue to move in the opposite direction, which either shows a disconnect between wholesale and retail prices or the divergence in representation of the two indices.

The wholesale price index (WPI)-based inflation remained in the negative territory for the eighth consecutive month at (-) 2.4 per cent in June.

Consumer price inflation, on the other hand, rose to 5.40 per cent in June from 5.01 per cent in the previous month, in the wake of a substantial increase in the index of food articles.

The annual rate of inflation, based on monthly WPI, stood at -2.40 per cent (provisional) in June 2015 compared to (-) 2.36 per cent (provisional) in the previous month and 5.66 per cent during the corresponding month of the previous year.

Build-up of inflation in the financial year so far has been 1.42 per cent compared to a build-up rate of 1.50 per cent in the corresponding period of the previous year.

The index for the `primary articles' group, which has a weight of 20.12 per cent in the wholesale price index, rose 1.4 per cent in June 2015.

The index for the 'food articles' group rose 1.3 per cent due to higher prices of arhar, poultry chicken, masur, urad and gram, tea, moong, egg, condiments and spices, fruits and vegetables, fish, maize, rice and coffee.

However, the prices of fish, barley, bajra, wheat, jowar, ragi, beef and buffalo meat declined.

The index for the 'non-food articles' group rose 2.2 per cent due to higher prices of niger seed, raw jute, sugarcane, gingelly seed, safflower (kardi seed), raw rubber, groundnut seed, rape and mustard seed, raw wool, castor seed, cotton seed, fodder, sunflower and mesta. 

However, the prices of copra (coconut), soyabean and raw cotton declined.

The index for  the 'minerals'  group rose 0.3 per cent due to higher prices of sillimanite, crude petroleum, copper ore and chromite.

However, the prices of manganese ore, magnesite, barytes, iron ore, zinc concentrate and phosphorite declined.

The index for the `fuel and power' group (weight of 14.91 per cent in WPI) rose 0.6 per cent in June due to higher prices of aviation turbine fuel, petrol and kerosene, lignite, high speed diesel and bitumen.

The index for the 'manufactured products' group (weight of 64.97 per cent in WPI) rose 0.1 per cent in June 2015.

Among manufactured products, the index for the 'food products' group rose 0.8 per cent due to higher prices of gram powder (besan), tea leaf, mustard and rapeseed oil, oil cakes, cotton seed oil, gur, groundnut oil, sunflower oil, processed prawn, sugar confectionary and ghee.

However, the prices of gingelly oil, mixed spices, bakery products, sugar, khandsari and sooji (rawa), wheat flour (atta) and maida declined.

The index for the 'beverages, tobacco and tobacco products' group rose by 1.8 per cent due to higher prices of cigarette, zarda, beer and bidi.

However, the price of rectified spirit declined.

The index for the 'textiles' group rose 0.6 per cent due to higher prices of gunny and hessian cloth, manmade fibre and fabric and cotton fabric.

However, the prices of tyre cord fabric, jute yarn and jute sacking cloth declined.

The index for 'wood and wood products' group rose 1.8 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 prices of kraft  paper and bags.

However, the price of newsprint declined.

The index for the 'leather and leather products' group rose 1.3 per cent due to higher prices of leather and leather footwear.

The index for the 'rubber and plastic products' group rose 0.4 per cent due to higher prices of plastic products and tubes.

The index for the 'chemicals and chemical products' group rose 0.3 per cent due to higher prices of non-cyclic compound and vitamins, washing soap, rubber chemicals, washing powder, organic manure, basic inorganic chemicals and toilet soap.

However, the prices of ammonium sulphate, antacid and digestive preparations, paints and turpentine oil declined.

The index for the 'non-metallic mineral products' group declined by 0.6 per cent due to lower prices of marbles, slag cement, bricks and tiles, glass bottles and bottleware.

However, the price of railway sleepers moved up.

The index for the 'basic metals, alloys and metal products' group declined by 1.9 per cent due to lower prices of copper products (other than wire), steel rods, ferromanganese, wire rods, HRC, pig iron and CRC, aluminium, melting scrap, billets, rounds, angles, sponge iron, iron castings, plates, silver, pencil ingots, sheets, ferrochrome, nuts/bolts/screw/ washers,     GP/GC sheets, rebars, steel castings, joist and beams and steel (pipes and tubes).

The index for the 'machinery and machine tools' group rose 0.1 per cent due to higher prices of industrial furnaces, insulators and IV sets, PVC insulated cable and ball/roller bearing.

However, the prices of electric switch gears, fibre optic cable and electric motors declined.

The index for the 'transport, equipment and parts' group rose 0.1 per cent due to higher prices of bi-cycles and railway brake gear. However, the prices of shafts (all kinds) and railway axle and wheel declined.

CSO has now revised the final WPI index for April 2015 to (-) 2.43 per cent against the earlier reported (-) 2.65 per cent based on the revised (final) final wholesale price index for 'all commodities'.