September WPI cools to 2.6% YoY but masks worrying rise in onion prices ahead of Diwali

Money Control, Shreya Nandi
October 16, 2017 , India 

India's wholesale inflation moderated to 2.60 percent in September, aided by softening food prices, although a sharp surge in onion prices, ahead of the festival season can pinch households’ kitchen budget.

In August, wholesale inflation stood at 3.24 percent in August and 1.36 percent in September 2016.

Wholesale inflation rate, measured by WPI, is a marker for price movements in bulk buys for traders and broadly mirrors trends in shop-end prices.

Latest price data released by the commerce ministry today showed that food prices, especially wheat, pulses, potatoes minerals and oilseeds continued to fall. However, prices of onion—a key ingredient used in Indian kitchen--witnessed nearly 80 percent jump in September as compared with a contraction (-)76.58 percent during the same period a year ago.

Heavy rains in Maharashtra and Karnataka has led to a demand-supply mismatch of onions, resulting in higher prices, coupled with rise in petroleum prices.

Fuel and power inflation, which has a weightage of 13.15 percent in WPI, stood at 9.01 percent in September, compared with 9.99 percent in August. Petrol prices grew 15.79 percent in September, versus a contraction of (-)9.28 percent a year ago, with liquefied petroleum gas (LPG) prices witnessing nearly 21 percent jump, compared with 20.75 percent growth in August and (-)16.16 percent decline a year ago.

“Initial data has placed the index for crude petroleum at 55.6 for September 2017, only 1% higher than the level for June 2017, despite the 17% increase in the average price of the Indian crude oil basket in INR terms during this time period. There is a possibility that the inflation for September 2017 would subsequently be revised higher on account of crude oil,” Aditi Nayar, Principal Economist at ICRA said.

Primary articles, which account for more than a fifth of the entire the index, fell sharply to 0.15 percent in September from 2.66 percent in August and 3.73 percent a year ago.

Prices of vegetables cooled down 15.5 percent, recovering from nearly 45 percent growth in August. Prices of pulses continued to slump for close to a year now at 24 percent.

“The correction in vegetable prices was the chief driver of the decline in primary food inflation to 2.0 percent from 5.8 percent,” Nayar said.

Prices of non-food articles fell 2.2 percent, while growing 3.71 percent a year ago and falling 3.6 percent decline in August.

Manufactured products’ that account for close to two-third of the index grew 2.72 percent in September, remaining almost flat, with a 2.45 percent jump in August.

On Thursday, data released by the government showed that retail inflation remained flat at 3.28 percent in September, as food prices remained steady, while fuel and housing prices witnessing modest growth during the month.

Factory output grew sharply at 4.3 percent in August, highest in nine months, showing signs of recovery, aided by an expansion in the manufacturing sector.

Earlier during the month, the Central Bank’s Monetary Policy Committee (MPC) forecasted that retail inflation will hover around 4.2-4.6 percent between October-March this year, higher than the previous projection of 4-4.5 percent. The inflation rate is still below the apex bank's medium-term target of 4 percent.

Location: India

Comments

Post a Comment

Popular posts from this blog

India Joins Russia in Voting Against West-Backed Move to Expand Powers of OPCW

The Wire: June 28, 2018 New Delhi: India voted against a UK-backed move that will allow the global chemical weapons watchdog to apportion blame for illegal attacks, criticising the decision to grant “unchecked powers” to the head of the group which could be used for “partisan” purposes. On Wednesday, more than two-thirds of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW) voted to authorise the international body to identify the perpetrators and sponsors of a chemical weapons attack. It also specifically called on the OPCW’s technical secretariat to begin work on identifying the perpetrators behind the use of chemical weapons in Syria. The draft decision, sponsored by 30 countries, was adopted at the fourth special session of the conference of the states parties to the Chemical Weapons Convention at the Hague, with 82 in favour and 24 negative votes. While Europe, the United States and their allies voted ‘yes’, there was strong oppo...
Read more

ED tracks Swiss Bank A/Cs of Agusta scamster

The Poineer February 10,2019 Rakesh K Singh The Enforcement Directorate (ED) has tracked a dozen Swiss bank accounts in the name of Rajiv Saxena, who is key accused in the Rs 3,600 crore AgustaWestland VVIP chopper scam. The ED has also found out accounts held by  his family members and associates where the kickbacks in the now scrapped deal were allegedly parked. Two bank accounts are in the name of Rajiv Saxena’s  associates Pankaj Jain and Sumita Jain who are also the authorised signatories. The  third is in the name of another associate Ajit Singh Bubber, but Rajiv and his family members are authorised signatories. The remaining nine accounts are largely owned and operated by Rajiv, his family members and associates. Rajiv Saxena was deported by the UAE authorities on January 30 and the ED formally arrested him the next day and a court later granted his remand to the agency. He is currently undergoing custodial interrogation by the ED. The agency had in 2017...
Read more

Pakistan under biggest pressure from anti-terror watchdog FATF, says Ajit Doval at NIA meet

India Today October 14, 2019 Jitendra Bahadur Singh, Kamaljit Kaur Sandhu  National Security Adviser Ajit Doval on Monday slammed Pakistan for providing a safe breeding ground for terrorists and using terrorism as an instrument of state policy. "If a criminal has the support of a state, it becomes a great challenge. Some of the states have mastered this. In our case, Pakistan has made it as an instrument of its state policy," NSA Doval said at an event of the National Investigation Agency on Monday. 'War no more an option' The National Security Adviser added that Pakistan was under immense pressure at the Financial Action Task Force (FATF) meeting, currently underway in Paris, to rein in terror groups operating from its soil, National Security Advisor Ajit Doval said on Monday. "One of the biggest pressures that has come on Pakistan today is because of the proceedings of Financial Action Task Force (FATF), it has created so much pressure on them...
Read more