Moderation in prices of edible oils, fruits helped moderate food inflation, but vegetables rose 39.7% and potatoes 49.8%
Moderation in prices of edible oils, fruits helped moderate food inflation, but vegetables rose 39.7% and potatoes 49.8%
India’s wholesale price inflation (WPI) fell from 12.4 per cent in August to 10.7 per cent in September, the lowest level in at least a year, food price growth slowed to 8.1% from 9.9% in August and manufactured products inflation decreased to 6.3%. 7.5% a month ago.
September marks the eighteenth consecutive month that wholesale price inflation has been above 10%. However, this is the fourth consecutive month that wholesale inflation has eased after hitting a record high of 16.63% in May, with 16.23% reported in June. The wholesale inflation rate for July has been revised to 14.07% from the earlier estimated 13.93%.
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While the Wholesale Food Price Index eased to 8%, inflation in vegetables rose to 39.7% in September, from 22.3% in August, with potato inflation rising to 49.8%. Cereal inflation also rose to 11.9% from 11.8% in August, with wheat inflation at 16.09%.
Inflation in fruits, however, cooled to 4.55% from 31.7% in August, as was manufactured food product inflation Which declined to 3% from 5.6% in the previous month. The price of eggs, meat and fish fell by more than half from 7.9% in August to 3.6% in September.
Bank of Baroda Chief Economist Madan Sabnavis suggested that the latest WPI readings should be interpreted with caution, as many numbers are derived from the September 2021 high base when wholesale inflation stood at 11.8%.
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“Therefore, even when global commodity prices were rising, WPI increased but showed a decline,” he said. For example, fuel inflation is 32.6 per cent higher due to the base effect as diesel and petrol prices have remained unchanged for a few months.
Inflation in primary articles declined from 14.9% in August to 11.7% in September and declined to 1.3% month-on-month, sharpest fall in key product categories, fuel and power inflation declined to 32.6% from 33.7% in August , but recorded a month-on-month increase of 0.13%.
“Inflation in September, 2022 is mainly contributed by increase in prices of mineral oils, food articles, crude petroleum and natural gas, chemical and chemical products, basic metals, electricity, textiles etc. compared to the corresponding month of the previous year. The Office of the Economic Adviser in the Ministry of Commerce and Industry said.
Mr Sabnavis expects wholesale inflation to fall below 10% from October, when the rate was over 13%, due to the higher base between October 2021 and March 2022. However, a re-increase in food prices is the ‘only threat’ to this prospect.
“The pressure on the food side will remain as the production of rice, pulses and vegetables will be lower this season due to a combination of less sown area and some losses due to prolonged monsoon. Oilseeds inflation is now negative, but may show a reversal, with production expected to decline,” he explained.