Lower supply boost the prices
The monthly inflation growth rate stood at 5% due to the growth in food
inflation. The latest weekly data disclosed the same. The index of
primary article including food and non food recorded 14.98% growth for
the week ended 5 December 2009 compared with 13.90% during the week
ended 28 November 2009 and 11.50% during 6 December 2008.
The index for 'Food Articles' group rose by 0.3 % to 292.2 from 291.2
for the previous week due to higher prices of urad and condiments &
spices (3% each),milk (2%) and maize, barley, pork, masur and wheat(1%
each). However, the prices of poultrychicken (10%), fish-inland (7%)
and tea (2%) declined. The index for 'Non-Food Articles' group rose by
0.5 % to 244.8 (Provisional) from 243.5(Provisional) for the previous
week due to higher prices of raw jute (11%), rape & mustard seed
(4%)and castor seed and copra (1% each). However, the prices of niger
seed (3%) and raw silk (2%) declined.
The index of fuel and power declined by 0.0 % to 344.9 from 345.0 for
the previous week due to lower prices of aviation turbine fuel (1%).
The WPI for the month of November 09 has recorded 5% growth rate
compared with November 2008. Food inflation is growing significantly
which has added stress on daily consumption basket. The current growth
in food inflation is the result of supply side constrains. Lower supply
of essential commodities has boosted the prices and the trend is likely
to continue.