India’s wholesale price inflation turns positive after 17 months

New Delhi, May 16 (IANS) India’s annual wholesale price index (WPI) accelerated into the positive terrain after staying in negative zone for 17 straight months, official data showed on Monday.

The annual WPI moved up to 0.34 percent for April, from (-)0.85 percent in March and (-)2.43 percent during the corresponding month of the previous year.

The upward movement in WPI mainly occurred on the back of a rise in the prices of pulses, potatoes, sugar, edible oils, egg, meat, fish and milk.

The data furnished by the Ministry of Commerce and Industry, showed that among the three major sub-indices of the WPI, the inflation rate for the index of primary articles, and fuels and power in April increased by 2.1 percent and 1.7 percent, respectively, on a month-to-month (MoM) basis.

Similarly, the index for manufactured products, which has the highest weightage in the WPI rose by 0.8 percent month-on-month.

On a year-on-year basis, the April data disclosed that prices of primary articles rose 2.34 percent, whereas the manufactured product edged up by 0.71 percent.

Food articles inflation jumped to 4.23 percent due to higher prices of tea, pulses, poultry and fruits and vegetables.

During the month under review, some commodities of mass consumption continued to upset household budgets, notable among them being pulses, whose prices were higher by as much as 36 percent over the like month of the previous year. Potatoes were dearer by 35.45 percent.

Other food items such as wheat and vegetables recorded modest price increases. Wheat was dearer by 2.22 percent, and vegetables by 2.21 percent.

Even under the manufactured products category, prices of commodities pertaining to processed food rose — especially sugar that was higher by 16.07 percent, followed by food products which were up by 8.01 percent.

The edible oil prices increased by 5.61 percent.

Notwithstanding the upward price trend, fuels prices fell. The fuel and power index was down 4.83 percent — petrol was cheaper by 4.18 percent and diesel by 3.94 percent. Cost of cooking gas fell by 18.4 percent.

In addition, the ministry revised the rate of the headline inflation for February. The WPI inflation was revised higher to (-) 0.85 percent from (-)0.91 percent which was reported on March 14 this year.

For the last six months, the WPI data has been (-)2.04 in November; (-)1.06 percent in December; (-)1.07 percent in January; (-)0.85 percent in February; (-)0.85 percent in March; and 0.34 percent in April.

The rise in WPI comes after the Consumer Price Index (CPI) for April showed an upward movement in annual retail inflation. The annual retail inflation rose to 5.39 percent from 4.83 percent in March.

The rise in both the inflation indices, coupled with forecast of a slight delay in the arrival of monsoon has reduced the chances of the Reserve Bank of India (RBI) further easing its key lending rates during the monetary policy review scheduled in June.

–IANS

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