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INFLATION WATCH

S.D. Naik

THE annual rate of inflation measured in terms of the wholesale price index (WPI) on a point-to-point basis declined marginally to 7.41 per cent for the latest recorded week ended November 18 from 7.55 per cent in the preceding week despite a further r ise in the prices of manufactured products. The prices of primary articles witnessed a further decline during the week.

The inflation rate for the primary articles group declined to 1.56 per cent from 1.99 per cent while that of the manufactured products group rose to 3.78 per cent from 3.12 per cent during the week.

The inflation rate during the corresponding week of last year (November 20, 1999) was 3.16 per cent based on final data. Thus, the current inflation rate continues to rule more than double the rate prevailing a year ago.

The inflation rate based on consumer price index for industrial workers (CPI-IW) declined to 4.0 per cent for the month of August 2000 from 4.95 per cent in July. It was 3.1 per cent for the month of August 1999.

The inflation rate based on consumer price index for urban non-manual employees (CPI-UNME) declined to 5.1 per cent for the month of August 2000 from 5.7 per cent in July. It was 4.5 per cent in August 1999.

The inflation rate based on consumer price index for agricultural labourers (CPI-AL) dropped to zero per cent for the month of August 2000 from 2.0 per cent in July. It was 5.1 per cent for the month of August 1999.

The major price movements during the latest week were for barley (up two per cent), fodder (up six per cent), raw jute (up five per cent), raw cotton and gingelly seed (up three per cent), hessian and sacking bags (up two per cent), injection moulded pl astic items (up six per cent), liquid nitrogen (up four per cent), tin boxes/containers (up five per cent), tractor components & accessories (up five per cent), poultry chicken (down eight per cent), inland fish (down four per cent), milk (down three per cent), coir fibre and raw rubber (down four per cent), rape & mustard seed, cotton seed and soya bean (down three per cent), bran oil (down four per cent), gur (down three per cent), and plastic suitcases (down seven per cent).

The official WPI for all commodities (1993-94 = 100) for the week ended November 18 declined to 157.9 from 158.2 in the preceding week.

The final WPI for all commodities (1993-94 = 100) for the week ended September 23 stood at 154.4 against the provisional index of 154.0 given earlier. Thus, the annual rate of inflation based on final data in terms of the WPI calculated on a point-to-poi nt basis for the week ended September 23 was 6.34 per cent against 6.06 per cent based on provisional data.

Over a period of four weeks (October 21 to November 18), the index rose for pulses by 3.1 per cent, fruits 2.7 per cent, woollen textiles 4.8 per cent, jute, hemp & mesta textiles 5.6 per cent, electrical machinery 5.1 per cent, and wires & cables by 12. 7 per cent.

Over the same period, the index declined for vegetables by 5.8 per cent, eggs, meat & fish 2.3 per cent, other food articles 5.9 per cent, oil seeds 5.9 per cent, wood and wood products 13.9 per cent and leather & leather products by 4.8 per cent.

As for the recent commodity price movements, the weakness witnessed in groundnut oil over the past few weeks continued. It was quoted in Mumbai market on December 4 at Rs 320 per 10 kg against Rs 330 on November 27. Among supplementary oils, imported pa lmolein was quoted at Rs 219 per 10 kg on December 4 against Rs 218 on November 27.

Sugar prices also continued to display a weak trend on the Navi Mumbai wholesale market. In spot deals on December 4, S-30 variety was quoted at Rs 1,410/l,525 per quintal while M-30 variety was quoted at Rs 1,450/1,531 per quintal.

In consumer durables, colour television majors have raised their prices by Rs 500 to Rs 2,000 per set over the last few weeks. However, the price hikes have been woven into attractive finance packages to attract customers.

In bullion, standard gold was quoted in Mumbai market on December 4 at Rs 4,515 per 10 gm against Rs 4,480 on November 27. Silver .999 was quoted at Rs 7,825 per kg on December 4 against Rs 7,790 on November 27.