WPI soars on high veggie prices

An unexpected increase in vegetable prices coupled with higher prices of pulses and other food items pushed the wholesale prices inflation (WPI) in May to 0.79%.

This is the second consecutive month of rise in WPI which remained in negative zone for most part of the last two years.

The WPI data comes on the back of the retail price inflation rising a 21-month high, prompting the government to call a special meeting of finance, food and agriculture ministers on Wednesday to increase supple side response.

Essential commodities
The government has also set up a Group of Ministers headed by Finance Minister Arun Jaitley to look for ways to insulate poor people from the vagaries of rising prices of essential commodities.

The government data for the month of May showed, the price rise in vegetables was close to 13% in May from 2.21% in April. Pulses inflation stood at 35.56%, almost similar to the April level. Overall, food inflation rose to 7.88% in May against 4.23% in April.

Prices of egg, meat and fish soared close to 10%, price of cereals were up nearly 5% and that of fruits close to 4%. Onion was the only staple that provided some relieve with inflation in the commodity remaining in negative zone.

Earlier in the day, industry demanded a proactive supply-side response from the government to tackle food prices.

“This clearly calls for a more proactive management from the supply side. Several steps have been taken by the government to augment supplies and improve distribution of such items. We hope that the situation would be managed well and that inflation will remain within RBI’s indicative trajectory,” FICCI said.

“Policymakers need to address through supply side responses the continuous rise in prices of commodities like pulses, food articles, cereals, wheat and other items,” Assocham said.