Financial Daily from THE HINDU group of publications
Saturday, Jul 23, 2005
Industry & Economy - Economy
Rise in food prices pushes up inflation
New Delhi , July 22
THE annual wholesale price index-based inflation rose to 4.14 per cent in the week ended July 9, from the previous week's 4.09 per cent. The spurt in the year-on-year inflation is largely due to an increase in food prices, according to data released by the Ministry of Commerce and Industry on Friday. The inflation rate was at 7.44 per cent during the corresponding week of the previous year.
On a disaggregated basis, the primary articles' group index rose by 0.7 per cent to 190.3 points due to costlier food and non-food articles and minerals. The fuel, power, light and lubricants group index stood firm at the previous week's level of 303.9 points. The manufactured products' group index also remained unchanged at the previous week's level of 170.6 points, despite costlier food products, chemicals and machinery.
Among the primary articles' group, the index for food articles' group was up by 0.8 per cent to 192.3 points owing to higher prices of poultry chicken (five per cent), vegetables (four per cent), fruits, barley and moong (two per cent each) and gram, masur, urad, wheat, maize, arhar and ragi (one per cent each). However, prices fell for tea (five per cent), bajra (three per cent), and jowar, condiments and spices (one per cent each).
The non-food articles' group index increased by 0.5 per cent to 180.7 points due to higher prices of raw tobacco (four per cent), groundnut seed (three per cent), cottonseed (two per cent) and sunflower, rape and mustard seed, and castor seed (one per cent each). But, prices declined for skins and gingelly seed (two per cent each) and copra, fodder, soyabean, raw cotton and raw jute (one per cent each). The index for minerals' group was up by 0.4 per cent to 250.1 points as prices shot up for bauxite (78 per cent) and fire clay (11 per cent). But barytes became cheaper by six per cent and iron ore by one per cent.
Among the manufactured products' group, the food products' group index was up by 0.4 per cent to 176.1 points due to higher prices of maida (three per cent), rice bran oil, salt and atta (two per cent each), and imported edible oil, khandsari, rape and mustard oil, and groundnut oil (one per cent each), but gingelly oil and ghee became cheaper by one per cent.
The textiles' group index fell 0.2 per cent to 129.4 points due to lower prices of polyester staple fibre (three per cent) and synthetic yarn (two per cent). However, prices rose for tyre cord (three per cent) and nylon filament yarn, cotton yarn-cones and Hessian and sacking bags.
An one per cent dip in the prices of paper white pushed down the paper and paper products' group index by 0.2 per cent to 177.5 points. A three per cent spurt in the prices of liquid chlorine moved up the chemicals and chemical products' group index by 0.1 per cent to 186.4 points. A marginal decrease in cement prices pushed down the index of non-metallic mineral products' group to 166.7 points.
The base metals alloys and metal products' group index declined by 0.4 per cent to 220.5 points due to lower prices of basic pig iron and foundry pig iron (six per cent each), steel sheets, plates and strips (three per cent) and other iron steel and ms bars and rounds (one per cent each), but bolts and nuts became costlier by two per cent. A four per cent rise in the prices of enamelled copper wires pushed up the machinery and machine tools' group index by 0.1 per cent to 146.4 points.
The Government also revised the final inflation to 5.60 per cent during the week ended May 14 compared to the provisional estimate of 5.55 per cent. The WPI stood corrected at 192.2 points in the second week of May against the provisional level of 192.1 points.
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