Wholesale price inflation higher at 4.86% in June

The annual rate of inflation based on the Wholesale Price Index (WPI) rose to 4.86 per cent in June from 4.70 per cent in May, driven by rising prices of food articles, especially vegetables like onion.

The wholesale price inflation rate stood at 7.58 per cent in June 2012, official data released today showed.

Build-up of inflation so far during the financial year was 1.53 per cent, compared to a build-up of 2.30 per cent in the corresponding period of the previous year.

The index for the primary articles group rose by 1.4 per cent to 232.5 in June 2013 from 229.3 in the previous month.

Among primary articles, food articles (which has a 14.34 per cent share in the WPI basket) showed an increase of 9.74 per cent in June amidst a spurt in the prices of onion, cereals and rice. Food prices had shown an 8.25 per cent increase in May.

Onion prices had shot up by 114 per cent in June, from 97.40 per cent in the previous month.

Vegetable prices too went up by 16.47 per cent during the month, from 4.85 per cent in May. It was (-) 9.05 per cent in April.

Inflation in the manufactured items category, however, declined to 2.75 per cent in June from 3.11 per cent in May.

The non-food articles category, which includes fibre, oilseeds and minerals, saw a sharp rise in inflation to 7.57 per cent, from 4.88 per cent in May.

The Central Statistics Office (CSO) has revised downwards inflation for April to 4.77 per cent from 4.89 per cent following a revision in the index.

The WPI inflation along with the high consumer price inflation should be a deterrent on RBI relaxing its tight money policy when it announces the monetary policy review on 30 July.