WPI inflation at 1.62% in June, food prices continue to hurt

India's wholesale price index (WPI), or wholesale inflation has risen more than expected, at 1.62% in the month of June 2016 as against -2.13% in the same month of last year. 

Food articles, which his part of 'primary articles' weighing 20.12% in the index, rose by 2.9% due to higher fruits and vegetable prices. The ministry said, "The index for 'Food Articles’ group rose by 2.9 percent to 279.0 (provisional) from 271.1 (provisional) for the previous month due to higher price of fruits & vegetables and urad (8% each), gram (7%), tea and maize (3% each), rice and wheat   (2% each) and barley, milk, mutton and fish-marine (1% each).  However, the price of moong (4%), poultry chicken and ragi (2% each) and pork, bajra, beef & buffalo meat and masur (1% each) declined."

The data showed that prices of potatoes rose by 64.48% in the month of June 2016 as against the same month of last year. Pulses, vegetables and fibres grew by 26.61%, 16.91% and 14.26%, respectively. 

source: tradingeconomics.com

As per data released by Ministry of Commerce & Industry, "Build up inflation rate in the financial year so far was 3.82% compared to a build up rate of 1.70% in the corresponding period of the previous year."

Non-food articles rose by 2.1% and minerals rose by 6.9% in the month of June 2016 as against corresponding period of last year. 

Fuel & power, weighing 14.91% on the index also saw a rise in WPI inflation. The statement said, "The index for this major group rose by 3.4 percent to 186.5 (provisional) from 180.3 (provisional) for the previous month due to higher price of furnace oil (13%), aviation turbine fuel (11%), high speed diesel (8%), petrol (5%), kerosene (2%) and LPG (1%).  However, the price of non-coking coal (12%) and bitumen (2%) declined."

With the highest weightage on the index, at 64.97%, manufactured products saw least rise in wholesale inflation. "The index for this major group rose by 0.2 percent to 156.0 (provisional) from 155.7 (provisional) for the previous month," it said.