WPI inflation cools in March as food articles turn cheaper

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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.

"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".

He said BNZ had expected inflation to lift 0.3 per cent on the quarter but raised that forecast to 0.4 per cent after government figures showed food prices jumped 1 per cent in March.

On April 12, the data released by the Central Statistics Office (CSO) showed that lower food prices eased March retail inflation to 4.28 percent from 4.44 percent in February 2018.

Inflation in non-food articles too declined by 0.3% to 120.2 from 120.6 for the previous month due to lower price of guar seed, niger seed, floriculture, raw cotton, cottonseed, mustard seed, among others.

Similarly, the protein-based food items such as eggs, meat and fish became cheaper by (-) 0.82 per cent during the month.

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On a monthly basis, wholesale prices increased 0.2 percent at the end of the first quarter.

The sub-category of manufactured food products became dearer by 0.31 per cent. However, the price of raw silk (7%), mesta and hides (raw) (5% each), sunflower (4%), soyabean (3%), fodder (2%) and raw wool, coir fibre and raw rubber (1% each) moved up. The price of petroleum coke (11 per cent) and kerosene (2 per cent) moved up.

Inflation in "fuel and power" basket, however, rose to 4.70 per cent in March from 3.81 per cent in the previous month.

On a year-on-year (YoY) basis, onion prices soared higher by 42.22 per cent whereas potato prices rose by 43.25 per cent.

According to the Commerce Ministry data, the WPI inflation in March 2017 was more than double at 5.11 percent. However, the March 2018 inflation is higher than 3.89 per cent recorded in the same month a year ago.

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