Wholesale inflation at 10-month low, eases to 2.76% in January

Prices of fuel and power, which together have a weightage of 13.15 percent in WPI, grew at 1.85 percent in January, as against a rise of 8.38 percent in December, mirroring a fall in international crude oil prices.

Petrol prices fell 3.35 percent in January from 1.57 percent in December and 1.33 percent a year ago.

Prices of primary articles—including food articles—that account for more than a fifth of the entire wholesale price index, came in at 3.54 percent in January as against 2.28 percent in December, mainly due to higher prices of food articles, cereals, paddy and minerals.

Food articles, which had shown negative growth in the last few months, grew 2.34 percent in January from (-)0.07 percent in December.

Prices of vegetables grew (-)4.21 percent as compared with (-)17.55 percent in December. Similarly, onion and fruit prices also negative growth.

Prices of manufactured products, which account for close to two-thirds of the index, stood at 2.61 percent in January, compared to 3.59 percent a month ago.

“We expect wholesale inflation to remain under 3.5 percent by the end of the fiscal year. It will be guided by recovery in the prices of food and manufactured goods. We expect oil prices to remain volatile (slightly towards the higher end) owing to removal of waivers granted by US government on the Iran sanctions and probable supply cuts by the OPEC,” Care ratings said in a note.