Lower Food Prices pull down the retail inflation
The headline CPI inflation (combined) for May 2014 eased to near March 2014 level at 8.28% (y-o-y) after accelerating to three month high at 8.59% in April 2014, driven by lower food prices. The index increased to 139.9 from 139.1 seen in April and 129.2 May 2013. With a weightage of 50%, inflation in food, beverages and tobacco, which softened drove down the headline figure. Retail food prices in May rose 9.40% from a year earlier, lower than a provisional 9.66% rise in April. Consumer Food Price Indices (CFPI) for all India for rural, urban and combined, released separately saw a growth of 10.27%, 7.98% and 9.56%, respectively.The vegetables prices on monthly basis rose to 3.48% from a rise of 3.54% in April. Also the prices eased to 15.27% (y-o-y) in May from 17.50% in April 2014. Meanwhile, fruits index increased to 23.17% from 21.73% in April 2014.
CPI inflation in protein-rich items such as eggs, fish and meat increased to 10.11% (y-o-y) in May from 9.41% in April. The rate of price rise for cereals and related products eased to 8.81% in May from 9.67% in the previous month. Moreover, the price of milk and its products eased 11.28% in May compared with 11.42% in the previous month. Prices of condiments and spices also eased to 8.76% from 9.33%in April. Moreover, the fuel and light category eased to 5.07% from 5.96% in April. Meanwhile, the price of clothing, bedding and footwear products increased from 8.83% in April to 8.86% in May.
The rate of price rise in rural area increased to stand at 8.86%, substantially lower from 9.25% in April. While in urban areas, the inflation eased to 7.55% from 7.69%.
In combined CPI some of the biggest m-o-m rise was registered by vegetables (3.48%), milk and milk products (1.20%) and fruits (1.19%), leading to a rise in Food, beverages and tobacco category at 0.91%. Clothing, bedding and footwear category also saw a rise of 0.60%. In the urban areas for May also, the biggest m-o-m rise was seen under vegetables (4.20% but lower from 6.53% in April), and condiments and spices saw the rise (1.99%). In the rural areas also for May, the categories eased on m-o-m basis including vegetables (3.16%, after rising to 5.50% in April), vegetables (1.12%) and Sugar etc (1.01%), leading to a deceleration in Food, beverages and tobacco category at 0.77%, after rising to 0.92% in April.
For May 2014, the state wise biggest uptick, in the rural segment, was noted by Odisha (1.83%, m-o-m) followed by Puducherry (1.19% m-o-m) while biggest fall was recorded in Dadra and Nagar Haveli (0.74% m-o-m). For May 2014, the state wise biggest upside, in the urban segment, was noted by Chandigarh (2.02%, m-o-m), while the minimum rise was noted by Punjab (0.22% m-o-m).
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