WPI inflation rises to 4.9% in June 2013

The annual rate of inflation, based on monthly WPI, stood at 4.86% for the month of June, 2013 (over June, 2012) as compared to 4.70% for May 2013 and 7.58% for June 2012. Build up inflation rate in the financial year so far was 1.53% compared to a build up rate of 2.30% in the corresponding period of the previous year.

The rise in inflation was driven by higher inflation for primary articles at 8.1%, showing rise from 6.7% in May 2013 from 5.8% in April 2013. The inflation for fuel and power group declined to 7.1% from 7.3% also that for manufactured products decreased 2.8% in June 2013 from 3.1% in May 2013.

The inflation figure for April 2013 has been revised downward to 4.77% compared to 4.89% reported earlier.

Price growth of primary articles, which accounts for 20% of the index, grew 8.1% y-o-y in June 2013 from 6.7% in May 2013. Food prices grew 9.7% with a 17.2% rise in cereal prices and a 19.1% rise in rice prices. The index for Food Articles group rose by 3.0% from the previous month due to higher price of poultry chicken (17%), fruits & vegetables (8%), egg (6%), maize (4%), masur and rice (3% each), fish-marine and wheat (2% each) and pork, barley, moong and fish-inland (1% each). However, the price of jowar, gram and urad (2% each) and ragi and condiments & spices (1% each) declined.

The index for Non-Food Articles group rose by 0.1% from the previous month due to higher price of raw cotton (6%), fodder, copra (coconut) and gingelly seed (5% each), safflower (kardi seed) and raw rubber (4% each), raw silk, rape & mustard seed, tobacco and flowers (2% each) and sunflower, coir fibre and castor seed (1% each). However, the price of guar seed (11%), soyabean (7%), groundnut seed (6%), niger seed and raw jute (4% each) and mesta and linseed (2% each) declined.

Fuel and power prices, which account for 15% of the index, grew 7.1% y/y in June. LPG prices grew 7.8%, with diesel up 22.8% and petrol down 7.8%. The index for this major group rose by 1.0% to 194.0 (provisional) from 192.0 (provisional) for the previous month due to higher price of light diesel oil and naphtha (3% each), non-coking coal, furnace oil and petrol (2% each) and high speed diesel and bitumen (1% each).

Prices of manufactured goods, which accounts for 65% of the index, grew 2.8% y/y. Manufactured food prices rose 6.4%, with chemicals up 2.9% and transport equipment up 3.5%. The index for Food Products group rose by 0.4% from the previous month due to higher price of gur (5%), wheat flour (atta), tea leaf (blended), canned fish, sooji (rawa) and tea dust (unblended) (2% each) and processed prawn, tea dust (blended), mixed spices, palm oil, maida and copra oil (1% each). However, the price of gingelly oil (5%), groundnut oil (4%), coffee powder (2%) and rice bran oil and oil cakes (1% each) declined.

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