The WPI for the month of July’10 stood at 9.97% compared to the previous month’s figure of 10.55%. It registered a growth of -0.54% in July’09 on a y-o-y basis . The inflation figures this month is the lowest in the past six months. They just managed to miss the double-digit by few marks. The figures were almost in line with the expectation

The benchmark indices were almost flat after the data release while there was also no major movement in INR. The RBI in its monetary policy review in mid-September now, is not expected to increase the interest-rate as it had said earlier that it would wait for the inflation figures to consider any further hike in the interest-rates

  • The sub-group of primary articles rose by 14.94% y-o-y against 7.64% in July’09.It registered a growth of 1.85% m-o-m mainly because of high growth in the food articles, which increased by 0.90% m-o-m. Food articles increased more than last month due to rise in prices of mutton, fish milk, eggs, cereals and pulses
  • In the same sub-group, the non-food articles increased by 0.80% m-o-m due to higher prices of fodder, oil-seeds, raw jute, rubber and silk and increase in the price of copra, etc. The index for minerals rose to 19.25% m-o-m which was due to higher prices of flluorite, magnesite, iron ore and steatite
  • The second sub-group of fuel, power, lights and lubricants increased to 14.29% y-o-y from -10.37% in July’09 which was pretty high. It registered a growth of 3.21% m-o-m due to higher prices of LPG, high speed diesel oil, aviation turbine fuel and petrol
  • The third sub-group of manufactured products jumped to 6.15% y-o-y from 0.10% in July’09. It registered a degrowth of -0.14% m-o-m mainly because of increase in the prices of edible oils, manmade textiles plastic products and machinery and machine tools
  • Food products declined by 0.61% m-o-m due to lower prices of bran, butter, khansari, coffee powder and gur. Sugar prices declined by 2.55% while there was an increase of 1.27% in edible oils due to higher prices of oil-seeds. Cotton textiles and man-made textiles surged by 0.38% and 0.48% due to increase in the prices of raw cotton, jute, raw silk and fibres. Rubber and plastic products increased by 0.06% while machinery and machine tools increased by 0.22%

 

Author:Rahul Sonthalia, Research Head, Kredent

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