KARACHI, May 4: Sensitive price-index based on a basket of 53 essential items of daily use moved up 0.82 per cent in the last week of April 2004. This was the highest increase in SPI during the month. In the earlier three weeks, SPI had not moved as fast as in the last one.

Data released by the Federal Bureau of Statistics show that it was primarily the prices of food items that pushed up the combined SPI of all income groups by 0.82 per cent during the last week of April. The increase in the prices of food items was 1.15 per cent.

But what kept the upward movement of overall SPI to 0.82 per cent was that the prices of non-food items rose by only 0.1 per cent and prices of utilities and transport & communications remained unchanged.

It was surely the reflection of a dramatic rise in the prices of wheat flour that had a big impact on SPI not only in the last week of April 2004 but also in earlier weeks. A serious wheat crisis has lately hit the country pushing up the prices of wheat flour to historic highs.

As a result food inflation has been up measured through both weekly sensitive price index and monthly consumer price index or CPI. CPI rose by 1.02 per cent in March 2004 over February and by 5.33 per cent over March 2003: SPI went up by 1.30 per cent over February and by 8.74 per cent over March 2003.

The upward movement of SPI by 0.82 per cent in the last week of April is not only the fastest in March and April 2004 but is also indicative of a real buildup in inflation.

In the first two weeks of April, the combined SPI of all income groups rather declined by 0.22 per cent and 0.57 per cent respectively and in the third week it surged by only 0.21 per cent.

SPI covers the prices of such essential items as wheat flour, rice, pulses, beef and mutton, eggs, bread, sugar, milk, cooking oil, vegetables, tea, items of ordinary clothing & footwear etc. It also covers the prices of petrol & diesel, liquefied petroleum gas and telephone rents etc.

Wheat flour prices have not eased in the first week of May and the prices of petrol and diesel have also been raised by 4.38 per cent and 1.46 per cent respectively for the first half of the month. So the SPI may keep up the rising trend at least in the first two weeks of this month.

If that happens then the CPI that responds to the changes in SPI would also rise further in May. The CPI data for April is still awaited but market watchers say CPI inflation would hardly show any sign of abating in April.

The policy makers have reset the CPI inflation target at 4.2 per cent for this fiscal year up from the initial 3.9 per cent. But government officials and central bankers privately say it may settle around 4.5 per cent.