WPI inflation cools in March as food articles turn cheaper

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India's wholesale price-indexed (WPI) inflation softened to 2.47 percent in March from 2.48 percent reported for the previous month, official data showed on Monday.

Wholesale inflation witnessed a growth of 2.48 percent in February and 5.11 percent in March, 2017. Under this, index for "Food Articles" group declined by 0.4 percent to 137.2 (provisional) from 137.8 (provisional) for the previous month due to lower price of egg (5%), gram, tea, coffee, poultry chicken and condiments & spices (3% each), rajma (2%) and fish-inland, masur, bajra, fruits & vegetables and beef and buffalo meat (1% each). The January's rate of increase in price rise has been revised to 3.02 percent from 2.84 percent.

According to the data that the Ministry of Commerce & Industry released today, food articles showed deflation at 0.29 per cent in March as against a slight 0.88 per cent inflation in the preceding month. However, the price of raw silk, mesta and hides, sunflower, soyabean, fodder, raw wool, coir fibre and raw rubber all moved up.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.04 percent, the yield on the long-term 30-year note almost steadied at 0.70 percent and the yield on short-term 2-year remained flat at -0.15 percent by 04:50 GMT.

However, the price of iron ore, chromite, manganese ore, limestone, zinc concentrate and lead concentrate moved up.

The primary articles hold weightage of 22.62% in WPI. The economists predict CPI rose 0.5 per cent in the March period, accelerating from a 0.1 per cent quarterly pace in December. This index holds 64.23% of WPI. Prices of pulses continued to slump for a year now, with rate of decline relatively slowing at (-) 20.58 percent in March compared to fall of (-) 24.51 percent in February and (-) 7.78 a year ago.

"Moreover, while average petrol prices at the pumps dropped 1.4 per cent between February and March this year, that was only a touch bigger than the 0.8 per cent drop seen between the same months in 2017".

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