WPI stabilises on lower food inflation

Wholesale price inflation (WPI) was stable in February at -0.9 per cent, unchanged from January, amid a sharp fall in food inflation but a slight pick-up in core inflation. Primary food inflation nearly halved from January to 3.4 per cent, led by a steep fall in inflation in fruits and vegetables, pulses, fish and meat.

Meanwhile, manufactured food products' inflation rose for the fifth consecutive month, pushing up core inflation as measured by the CRISIL Core Inflation Indicator (CCII). Excluding food products, CCII was only mildly positive at 0.1 per cent. Led by a sharp depreciation in the rupee, manufactured products' inflation quickened in February but was still in the negative zone as prices of basic inputs such as oil and metals and minerals continued to fall. Low-capacity utilisation in most sectors also limited manufacturers' pricing power.

Food inflation (primary plus manufactured food) fell sharply to 3.7 per cent in February from five per cent in January due to a steep fall in primary food inflation (to 3.4 per cent from six per cent) led by lower inflation in pulses, fruits and vegetables, fish and meat. By contrast, inflation in processed food, which has been rising since September 2015, touched 4.4 per cent in February on the back of a steady pick-up in oilseeds' inflation.

In the fuel and power category, inflation remained negative (-6.4 per cent) in February but climbed up from January (-9.2 per cent).