Wholesale prices drop for 16th straight month

Manufacturing prices keep on falling, while food inflation eases to 3.35 per cent

General wholesale prices fell for the 16th straight month in February, dropping 0.91 per cent compared to 0.90 per cent in January. While it was way back in 1975-76 that there was Wholesale Price Index (WPI)-based deflation for a full year, the index had last showed inflation in October 2014, at 1.66 per cent.

Government data released on Monday, showed that total build-up in deflation for the current financial year leading up to February was 1.19 per cent, compared to a 2.61 per cent in the corresponding period of the previous year.

The price pressure points remained, particularly in food articles. Inflation declined 3.35 per cent in February, compared to 6.02 per cent in the previous month. Total food inflation rise in this financial year is 3.93 per cent, lower than the 6.86 per cent rise seen in the corresponding period last year. Pulses, which have consistently provided the main inflationary push among food articles in FY16, continued to rise by 38.84 per cent, although inflation mellowed from the 44.91 per cent rise witnessed in January.

For onions, however, prices dropped significantly, going down 13 per cent compared to the last month, when there was inflation at 5.51 per cent. Vegetables prices, which rose by the second-largest margin in January at 12.52 per cent, decreased 3.34 per cent in February. The fall in potato prices, which has continued for the past six months, eased. It fell 6.28 per cent in February after a 17.08 per cent drop in the previous month. Egg, meat and fish constituted the second-fastest rising food article, with inflation standing at 3.47 per cent, lower than 5.69 per cent in January. Non-food inflation declined 5.88 per cent, lower than 8.24 per cent seen the previous month.

Another area where prices remained depressed was fuel and power, (15 per cent weightage) which kept on falling, although at a subdued rate of 6.40 per cent from the steep fall of 9.21 per cent a month ago.

Diesel fell by the most at 7.75 per cent in February.