Costlier food pushes WPI to 12-month highhttps://indianexpress.com/article/business/business-others/costlier-food-pushes-wpi-to-12-month-high/

Costlier food pushes WPI to 12-month high

Though the pace of deflation has been weakening since last four months, high food prices continue to remain a cause of concern.

India’s inflation rate based on the Wholesale Price Index (WPI) rose to a 12-month high of – 0.73 per cent in December primarily due to rise in prices of food articles, especially egg, meat and fish. The inflation rate, however, continued to stay in the deflationary zone for the fourteenth straight month.

The statistical effect of a low base also contributed to the rise in WPI inflation during the month. In November, Wholesale Price Index inflation stood at (-) 1.99 per cent, while it was (-) 0.50 per cent in December 2014. The rate of price rise for egg, meat and fish was 5.03 per cent in December.

Though the pace of deflation has been weakening since last four months, high food prices continue to remain a cause of concern. According to data released by the commerce and industry ministry, food inflation rose to 8.17 per cent in December from 5.20 per cent in November.

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“We see a continuation of the deflationary trend, albeit at a slower pace. Prices of select food articles, however, continue to exhibit pressure on the upside and this needs continuous monitoring by the government. Raising agri-productivity and astute supply side management is the key to tackling the elevation in prices of food articles,” Ficci’s Secretary General A Didar Singh said. The build-up of inflation in vegetables increased by 20.6 per cent year-on-year in December, though on a month-on-month basis the prices softened by 4.4 per cent.

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Inflation in pulses recorded a year-on-year rise of 55.6 per cent in December, but the prices weakened 0.6 per cent from the previous month.

Similarly, the rate of price rise of onion increased 25.9 per cent on year during December, while recording a decline of 18.5 per cent from November. Inflation in potato stood at (-) 34.99 per cent during December.

Non-food manufactured products inflation, or core inflation, declined to (-) 2.0 per cent from (-) 1.9 per cent in November. Lower prices of furnace oil, bitumen, petrol and aviation turbine fuel helped to keep inflation in fuel and power segment in negative territory at (-) 9.15 per cent, but it inched up from the previous month’s inflation of (-) 11.09 per cent.