Dear All,  

   September 2014 WPI inflation declines to 2.4%

The WPI inflation for the month of Sep 2014 declined to 2.4% from 3.7% in Aug 2014, 5.4% in July 2014, 5.6% in June 2014 and 6.2% in May 2014. The decline in WPI inflation in the month of Sep 2014 is attributed to decline in the prices of primary articles (2.18%), food articles (3.5%), non-food articles (0.52%), fuel and power (1.33%) and manufactured goods (2.84%). The recent measures taken by the government such as check on hoarding and bringing onions and potatoes in essential commodities list has helped to ease inflation in general and food inflation in particular

Driven by the decrease in the prices of cereals, pulses, milk, fuel and power, oilseeds, the WPI inflation declined to 2.4% (Y-O-Y) for the month of September 2014 as compared to 3.7% (Y-O-Y) for the month of August 2014. The Index for Wholesale Prices for the month of September 2014 declined by 0.4% to 185 from 185.7 for the previous month.

  Trend in WPI inflation since April 2011                                                                                                       (Y-O-Y %)

                                                     

Source: PHD Research Bureau, compiled from the office of the economic advisor to the Govt. of India

   WPI inflation in select commodities

Commodity		WPI Inflation Y-o-Y % growth
		July’14	August’14	Sep’14
1	All Commodities	5.41	3.74	2.38
2	Primary Articles	6.78	3.89	2.18
3	Food Articles	8.47	5.15	3.52
4	Cereals	5.18	3.70	3.45
5	Vegetables	(-) 1.15	(-) 4.88	(-) 14.98
6	Non-food Articles	2.89	4.19	0.52
7	Fuel & Power	7.35	4.54	1.33
8	Petrol	5.90	(-) 0.15	(-) 9.42
9	Manufactured Products	4.07	3.45	2.84
10	Sugar	1.99	2.52	1.68
11	Edible oils	0.97	(-) 0.41	(-) 1.57
12	Cement & Lime	(-) 3.09	(-) 1.37	1.95

     Source: PHD Research Bureau, compiled from the office of the Economic Advisor to the Govt. of India

The build up in inflation in the financial year so far (September 2014) stands at 2.6% as compared to a build up of 6.2% in the corresponding period of the previous year. Buildup in WPI inflation has declined due to fall in the prices of cereals, rice, vegetables, onion, fuel and power etc.

   Build up in inflation from March in select food commodities                             (%)

 Source: PHD Research Bureau, compiled from the office of the Economic Advisor, Govt. of India

Manufacturing inflation stands at 2.84% (weight 64.97%)

The WPI inflation for manufactured products stands at 2.84% for the month of September 2014 as against 3.45% in August 2014. The index for this major group remained unchanged at its previous month’s level of 155.8.

    Trend in WPI inflation in manufactured products   (in %)

Source: PHD Research Bureau, compiled from the office of the Economic Advisor

Food inflation declines to 3.52% (Weight 14.34%)

Food inflation for the month of September 2014 has declined to 3.52% from 5.15% for the month of August 2014, on account of decrease in the prices of cereals, pulses and milk.

  Pattern of food inflation                                                             (Y-o-Y %)                Food articles Index since Apr 2011  

    

Source: PHD Research Bureau, compiled from the office of the Economic Advisor, Govt. of India

The index for Food Articles group declined by 1.4% to 261.8 from 265.4 for the previous month due to lower price of tea and fruits & vegetables (5% each), maize (4%), poultry chicken and fish-marine (3% each) and condiments & spices, jowar, pork and moong (1% each). However, the price of egg and coffee (4% each), fish-inland and barley (3% each), masur and arhar (2% each) and rice, bajra, gram, ragi and urad (1% each) have moved up.

Non-food articles inflation decreases to 0.52% (weight 4.26%)

The rate of inflation for non-food articles for the month of September 2014 stands at 0.52% as compared to 4.19% for the previous month. The index for Non-Food Articles group declined by 2% to 214.3 from 218.7 for the previous month due to lower price of flowers (17%), safflower (kardi seed) (16%), soyabean (13%), raw rubber (8%), gingelly seed (5%), mesta, copra (coconut) and raw cotton (3% each), linseed and castor seed (2% each) and coir fibre (1%). However, the price of fodder (8%), groundnut seed (6%), guar seed (5%), niger seed (4%) and raw silk (1%) have moved up.

Fuel & power inflation declines to 1.33% (weight 14.91%)

The rate of inflation for fuel and power for the month of September 2014 stands at 1.33% as compared to 4.54% for the previous month. The index for this major group declined by 0.3% to 213.4 from 214  for the previous month due to lower price of petrol (4%), bitumen (2%) and aviation turbine fuel and furnace oil (1% each). However, the price of lubricants (4%) and high speed diesel (1%) have moved up.