The Indian Ministry of Commerce and Industry has reported the official Wholesale Price Index for ‘All Commodities’ (Base: 2011-12=100) for September 2021 increased to 133.8 from 133.0 in August.

 

The index for manufactured products which account for almost 65% of the overall index increased to 136.0 in September 2021 from 135.9 for August 2021. Out of the 22 groups of manufactured products 17 saw increased prices; 4 groups witnessed a decline and for two groups the prices remained unchanged in September 2021 as compared to August 2021.

 

The increases in prices were mainly contributed by basic metals; food products; chemicals and chemical products; machinery and equipment; motor vehicles, trailers, semitrailers; and fabricated metals. The price indices for wood products India remained largely unchanged except for a slight rise in the index for sawnwood.

 

The annual rate of inflation in September was almost 11% higher over September 2020. The high rate of inflation in September 2021 was primarily due to rise in prices of mineral oils, basic metals, non-food articles, food products, crude petroleum and natural gas, chemicals and chemical products.

 

Surging raw material costs

 

According to Plyreporter wood raw material prices hit an all-time high in September seriously challenging wood product manufacturers. Millers report prices for poplar logs have jumped by around 25% due to supply issues.

 

Similarly, the price of safeda (Euc.) also increased sharply in the past six months. Traders say it is unlikely that prices come down as supplies are limited.

 

Because of supply issues the industry reports a decline in capacity utilisation with many smaller units being forced to stop production. Associations across the country have warned wholesale prices for finished products will have to rise.