Wholesale inflation falls to 2.6% in Sept as food items soften

Andrew Cummings
October 16, 2017

India's wholesale price inflation eased unexpectedly in September, after accelerating in the previous two months, data from the Ministry of Commerce & Industry showed Monday.

"Index of "Food Articles" group declined by 4 per cent for the previous month due to lower price of fruits and vegetables (15 per cent), betel leaves (6 per cent), ragi (4 per cent), bajra (3 per cent), pork, maize and tea (2 per cent each) and poultry chicken (1 per cent)", it added. The wholesale inflation rate was at 1.36 per cent during September 2016.

Instead, prices of the other major group under the WPI - manufactured products - which comprise almost 64.23 per cent of the index, rose marginally by 0.4 per cent. On the other hand, inflation of pulses, milk, egg, meat fish, spices, oilseeds, fibre, oilseeds, raw rubber, metallic minerals, tobacco products, textiles, paper and paper products, basic metals, chemical products, pharmaceutical products, fabricated metal products, electrical equipment, and other transport equipment increased in September 2017. Inflation in the overall food group, which combines the food category in the primary articles segment and the manufactured food category as well, slowed to 1.99% in September from 4.41% in August. Nayar said that core inflation, which excludes food and energy prices, rose to a 35-month high of 2.8% in September from 2.6% in August. However, the price of manufacture of knitted and crocheted apparel declined by 1 per cent. "The correction in vegetable prices was the chief driver of the decline in primary food inflation to 2.0% from 5.8%", ICRA said in a note.


Product-wise, the price of high-speed diesel rose by 2 per cent during September, while that for petrol climbed by 3 per cent, and for LPG by 10 per cent.

Earlier in the month, the central bank's Monetary Policy Committee (MPC) forecast that retail inflation will hover around 4.2-4.6 percent between October-March this year, higher than the previous projection of 4-4.5 percent.

Growth in the Wholesale Price Index slowed in September from 3.24% in August.


The final print of July WPI inflation remained unchanged from the provisional estimate of 1.88 per cent.

However, on a year-on-year basis, the inflation has gone up by 124 basis points from the same month last year.


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