Cheaper fuel, food prices ease inflation

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Our Bureau

New Delhi, June 3

THE annual wholesale price index-based inflation went up 5.38 per cent in the 12 months to May 21, lower than the previous week's 5.55 per cent. The drop in the year-on-year inflation was largely on account of last year's high base and an overall decline in food and fuel prices during the latest reported week, according to data released here today by the Ministry of Commerce and Industry.

The WPI fell by 0.1 per cent to 192 points even as heavy weighted manufactured products' prices remained unchanged for the second consecutive week. The index stood at 182.2 points during the corresponding period last year.

On a disaggregated basis, the index of Primary Articles' group was down 0.1 per cent to 188.7 points due to cheaper food and non-food articles. The Fuel, Power, Light and Lubricants' group index was down 0.1 per cent to 293.1 points due to two per cent fall in the prices of naphtha. The index for Manufactured Products' group, the heaviest in the WPI basket, stood firm at 170.6 points despite cheaper food products, textiles, chemicals and machinery.

Among the Primary Articles' group, the Food Articles' group index slipped by 0.2 per cent to 190.6 points due to lower prices of beef and buffalo meat (11 per cent), fish-marine (two per cent) and masur, condiments and spices, and bajra (one per cent each). The index of Non-Food Articles' group fell by 0.1 per cent to 179.1 points owing to cheaper fodder (three per cent), gingelly seed and soyabean (two per cent each) and copra (one per cent). However, prices of raw rubber (three per cent), and nigerseed and raw tobacco (one per cent each) went up during the period.

Among the Manufactured Products' group, the Food Products' group index was down 0.2 per cent to 173.7 points due to lower prices of gingelly oil (two per cent) and coconut oil, sunflower oil, sugar and ghee (one per cent each). However, prices rose for salt (two per cent) and oil cakes and khandsari (one per cent each).

A six per cent spurt in the prices of soft drinks pushed up the index for Beverages Tobacco and Tobacco Products' group to 222.2 points. The textiles group index was down by 0.2 per cent to 131.4 points due to cheaper cotton yarn-hanks and hessian and sacking bags (one per cent each), but hessian cloth became costlier by one per cent.

A marginal increase in cement prices propped up the Non-Metallic Mineral Products group index by 0.3 per cent to 168.6 points. A small rise in prices of pipes and tubes pushed up the Base Metals Alloys and Metal Products group index to 222 points. The Machinery and Machine Tools group index fell by 0.1 per cent to 145 points due to lower prices of batteries (four per cent) and power-driven pumps (one per cent). However, prices moved up for valve (five per cent), other pumps (two per cent) and ring spinning and doubling frames (one per cent).

The Government also revised upwards inflation to 5.10 per cent during the week ended March 26 as compared to the provisional estimate of 5.05 per cent. WPI stood corrected at 189.5 points during the last week of 2004-05 against provisional level of 189.4 points.

(This article was published in the Business Line print edition dated June 4, 2005)
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