Risk on inflation front
The official Wholesale Price Index for 'All Commodities' (Base: 1993-94
= 100) for the month of April 2010 rose by 1.2% to 253.7 from 250.8 for
the previous month.
The annual rate of inflation, based on monthly WPI, stood at 9.59% for
the month of April 2010 (over April 2009) as compared to 9.90% for the
previous month and 1.31% during the corresponding month of the previous
year
The index for primary articles group rose by 2.3% to 289.7 from 283.2
for the previous month. The index for 'Food Articles' group rose by 2.8
% to 292.4 from 284.4 for the previous month due to higher prices of
fish-marine and moong (5% each), urad (4%), milk (3%), condiments &
spices (2%) and arhar, maize, ragi, barley, pork, gram, fish-inland and
jowar (1% each). However, the prices of wheat and masur (3% each), tea
and eggs (2% each) and bajra (1%) declined.
The index for 'Non-Food Articles' group rose by 0.7% to 256.1 from
254.4 for the previous month due to higher prices of raw rubber (9%),
logs & timber (5%), castor seed (4%), skins (raw) (2%) and
groundnut seed, raw silk, tanning materials, raw jute and mesta (1%
each). However, the prices of fodder (9%), hides (raw) and niger seed
(4% each), copra (3%), tobacco (2%) and linseed and rape & mustard
seed (1% each) declined.
The index for 'Minerals' group rose by 3.1% to 629.2 from 610.5 for the
previous month due to higher prices of chromite (31%), fire clay (14%),
iron ore (4%), barytes (2%) and feldspar (1%). However, the prices of
magnesite (24%), steatite (5%) and asbestos (3%) declined.
The index for fuel and power group rose by 0.6% to 364.0 from 361.8 for
the previous month due to higher prices of naphtha (4%), aviation
turbine fuel (3%), light diesel oil and liquefied petroleum gas (2%
each) and petrol and high speed diesel oil (1% each). However, the
prices of bitumen (1%) declined.
The index for manufactured group rose by 0.8% to 216.6 from 214.9 for
the previous month. The index for 'Food Products' group declined by
3.1% to 249.1 (Provisional) from 257.0 (Provisional) for the previous
month due to lower prices of khandsari and sugar (6% each), sooji
(rawa) and rape & mustard oil (5% each), gur, maida and sunflower
oil (4% each), unrefined oil, soyabean oil and oil cakes (3% each),
bran (all kinds), imported edible oil, hydrogenated vanaspati, rice
bran oil and atta (2% each) and gingelly oil (1%). However, the prices
of salt (8%), groundnut oil (2%) and coconut oil, coffee powder and
cattle feed (1% each) moved up.
The index for 'Beverages Tobacco & Tobacco Products' group rose by
0.1% to 320.1 from 319.9 for the previous month due to higher prices of
aerated water (6%) and soft drinks (all kinds) (2%). However, the
prices of potable country liquor (2 %) and rectified spirit (1%)
declined.
The index for 'Textiles' group rose by 1.5% to 158.2 from 155.8 for the
previous month due to higher prices of woollen yarn, texturised yarn
and synthetic yarn (5% each) and cotton yarn-cones, cotton yarn-hanks
and other cotton yarn (3% each). However, the prices of hessian &
sacking bags (2%) and hessian cloth (1%) declined.
The index for 'Paper & Paper Products' group rose by 0.7 % to 205.9
from 204.5 for the previous month due to higher prices of kraft paper
(5%) and m.g. poster paper (2%).The index for 'Rubber & Plastic
Products' group rose by 0.3 % to 175.9 from 175.3 for the previous
month due to higher prices of plastic containers (4%), cycle tubes
(3%), motor tyres (2%) and giant tyres (1%). However, the prices of
cycle tyres (5 %) and suitcases (1%) declined.
The index for 'Chemicals & Chemical Products' group rose by 0.1% to
232.8 from 232.6 for the previous month due to higher prices of phenol
(25%), synthetic rubber (13%), acid (all kinds) and synthetic resins
(6% each), polystyrene (5%), monocrotophos, super phosphate p205
content and titanium dioxide (3% each) and acetylene, rubber chemicals,
soda ash, toilet soap, vitamin liquids, tooth paste and resins (all
kinds) (1% each). However, the prices of complex fertilizer n_content
(7 %), synthetic detergent (6%), benzene, caustic soda and complex
fertilizers-npk content (4% each), methanol and ammonium sulphate
n_content (3% each), endosulfan (2 %) and liquid chlorine (1%)
declined.
The index for ' Non-Metallic Mineral Products' group rose by 3.4% to
227.0 from 219.6 for the previous month due to higher prices of cement
(5 %) and asbestos cement corrugated sheets (4%).
The index for 'Basic Metals Alloys & Metal Products' group rose by
6.7% to 276.5 from 259.1 for the previous month due to higher prices of
blooms and billets & slabs (25% each), skelps (16%), wire(all
kinds) and oromild steel & tensile plates (15 % each), CR coils
(14%), CR sheets and bars & rods (10% each), tin boxes/containers
(8 %), angles, channels & sections (6%), steel ingots (5%), cast
iron spun pipes (4%), other iron steel (3%), zinc ingots and ms bars
& rounds (2% each) and pipes & tubes, cast iron casting, bolts
& nuts, steel sheets, plates & strips, lead ingots, alloy steel
casting and steel wire (1% each). However, the prices of bright bars
(7%) declined.
The index for 'Machinery & Machine Tools' group rose by 0.3% to
178.5 from 178.0 for the previous month due to higher prices of
enamelled copper wires (3%), hydraulic machine and electric motors (2%
each) and switch gears and batteries (1% each). However, the prices of
ACSR conductors (7%) declined.
The index for 'Transport Equipment & Parts' group rose by 0.2% to
176.6 from 176.2 for the previous month due to higher prices of car
chassis (assembled) and crank shafts (1% each).
Earlier, inflation mostly driven from the supply side is now getting
increasingly generalized.
The risk factors for the WPI inflation are
rising. First, the prospects for the 2010 monsoon are not yet clear.
Second, crude prices continue to be volatile. Third, there is evidence
of demand-side pressures building up. However, RBI projected lower
inflation for the current financial year at 5.5% for March 2011.
