Metallic minerals record steep hike in 2004-05

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NEW DELHI, May 5: It was the prices of metallic minerals and basic metals which witnessed steep rise during 2004-05. The impact of spiralling prices of metallic minerals on inflation rate, however, was not much because they have a very low weight in the Wholesale Price Index (WPI). The other commodities which witnessed sharp rise in prices during the last fiscal were fuel oils, vegetables, soyabean and metal and alloy products.

The prices of metallic minerals in 2004-05 recorded a rise of 175%, the highest for any product category. The rising prices of minerals had its impact on prices of manufactured goods. According to an analysis on annual inflation, the prices of basic metals and alloys metals products jumped by more than 20% during the year. The contribution of these products to inflation rate in the manufactured goods category was as high as 45%.

The spiralling prices of minerals, however, did not have much impact on the WPI-based inflation rate as the contribution of minerals was as low as 0.5 in the inflation index. The mineral which witnessed huge upsurge in prices during the year was iron ore.

The demand for Indian iron ore has come mainly from China. According to Chinese estimates, India exported iron ore worth $3.9 billion during April-November 2004 as against $1.1 billion during the corresponding period in 2003. The high demand has cast its shadow on prices of iron ore during the year.

Among the primary articles category, the prices of soyabean during 2004-05 jumped up by 27% and vegetables by more than 11%. Fuel prices too during the year went up by 10%.