WPI inflation falls to 8-month low of 5.05% in January

Cheaper food prices helped push the annual rate of inflation based on the wholesale price index (WPI) to an eight-month low of 5.05 per cent in January, down significantly from the 6.16 per cent seen in December 2013. The significant fall has been due mainly to the steep fall in vegetable prices.

The annual rate of inflation based on WPI stood at 5.05 per cent in January 2014 compared to 6.16 per cent in the previous month the previous month and 7.31 per cent during the corresponding month of the previous year.

Build-up of inflation so far in the financial year was 5.17 per cent compared to a build-up of 5.78 per cent in the corresponding period of the previous year.

The index for the `primary articles' group, with a weight of 20.12 per cent in the wholesale price index, declined by 1.9 per cent during the month.

Among primary articles, the index for the 'food articles' group declined by 2.7 per cent due to lower price of fruits and vegetables, maize, ragi and gram, coffee, arhar and tea.

However, the price of poultry chicken, pork, urad and egg and moong, bajra, condiments and spices, masur, fish-inland, beef and buffalo meat and fish-marine moved up.

The index for the 'non-food articles' group rose by 0.1 per cent due to higher price of guar seed, raw cotton, copra (coconut), mesta, castor seed and fodder, linseed and raw jute. However, the price of logs and timber, flowers, raw silk, safflower, gingelly seed, soyabean and tobacco, cotton seed and raw rubber declined.

The index for the 'minerals' group declined by 0.4 per cent due to lower prices of barytes and crude petroleum. However, the price of copper ore, steatite, zinc concentrate and chromite moved up.

The index for the `fuel and power' group, which has weight of 14.91 per cent in the WPI , rose 0.7 per cent due to higher price of LPG, aviation turbine fuel and petrol and furnace oil, kerosene, high speed diesel and bitumen.

The index for the `manufactured products' group, which has a weight of 64.97 per cent in the WPI, rose 0.5 per cent.

Among manufactured products, the index for the 'food products' group declined by 0.4 per cent due to lower prices of vanaspati, gur, rice bran oil, khandsari, groundnut oil, gingelly oil, wheat flour (atta), gola (cattle feed), sugar, oil cakes, sunflower oil and mixed spices.

However, the price of copra oil, processed prawn, cotton seed oil and tea dust (blended), ghee, powder milk and sooji moved up.

The index for the 'beverages, tobacco and tobacco products' group rose 1.2 per cent due to higher price of dried tobacco, rectified spirit, cigarette and soft drinks and carbonated water.

The index for the 'textiles' group rose 0.5 per cent due to higher price of tyre cord fabric and jute sacking cloth. However, the price of cotton yarn declined.

The index for the 'wood and wood products' group rose 1.8 per cent due to higher price of processed wood.

The index for the 'paper and paper products' group rose 0.3 per cent due to higher price of books, periodicals and journals, laminated paper and card board and computer stationery, cream laid woven paper, paper rolls and newspaper.

However, the price of paper pulp, corrugated sheet boxes and paper cartons / boxes and kraft paper and bags declined.

The index for the 'leather and leather products' group rose 0.2 per cent due to higher price of leather handbags, wallet and footwear / safety boot and leather shoe uppers. However, the prices of leather gloves and leather sole declined.

The index for the 'rubber and plastic products' group rose 0.3 per cent due to higher price of tubes and plastic products.

The index for the 'chemicals and chemical products' group rose 0.5 per cent due to higher price of basic organic chemicals, hair / body oils, washing powder and rubber chemicals and vitamins, thermocol, washing soap, dye and dye intermediates and turpentine oil.

However, the price of synthetic resin, non-cyclic compound and pigment and pigment intermediates declined.

The index for the 'basic metals, alloys and metal products' group rose 1.4 per cent due to higher price of sheets, steel castings, silver and gold and gold ornaments, melting scrap, aluminium and pig iron and steel rods, sponge iron, HRC plates, steel structures, rounds, angles, wire rods, GP / GC sheets, ferro silicon, CRC and metal containers). However, the price of ferro manganese and brass declined.

The index for the 'machinery and machine tools' group rose 0.3 per cent due to higher price of control equipments, loader and electrical wires / conductor and industrial furnaces, textile machinery, pump and assembly, electrical pumps, electric motors, ball / roller bearing and electronic PCB / micro circuit. However, the price of sprinkler, communication equipment, fans and air conditioner and refrigerators and electric switch gears declined.

The index for the 'transport, equipment and parts' group rose 0.1 per cent due to higher prices of auto parts.

The CSO has, meanwhile, said the revised WPI inflation rate for November 2013 remained unchanged at its provisional level of 7.52 per cent as reported earlier.