India’s wholesale prices remained in deflationary mode for the seventh month in a row in October, with the Wholesale Price Index (WPI) reflecting an inflation of -0.52% from -0.26% in September.
Wholesale price inflation stood at 8.4% in October 2022, creating a high base effect for last month’s index. On a month-on-month basis, the WPI was up 0.4% in October.
The wholesale food index was up 1.07% in October compared to last year, with food prices up 1% sequentially from September levels as well. But the trends within the food basket were divergent and runaway prices of some items like onions and pulses pose risks to the retail inflation trajectory which eased to a four-month low of 4.87% in October.
While vegetable prices dropped 21%, inflation in paddy and cereals accelerated to 7.5% and 9.4% respectively, while pulses and onion inflation jumped to 19.4% and 62.6%, respectively. Fruits inflation picked up to 6.3% while milk inflation eased marginally to 7.9% from 8.6% in September.
Manufactured products’ prices were unchanged from September levels and their year-on-year inflation rate moderated marginally from -1.3% in September to -1.1%.
Fuel and power prices rose 0.65% from September levels, but were 2.5% below last year’s levels. Crude petroleum and natural gas inflation which hit an eight-month high of 15.6% in September, retreated to -2.2% in October.
“The negative rate of inflation in October, 2023 is primarily due to fall in prices of chemicals and chemical products, electricity, textiles, basic metals, food products, paper and paper products, etc. as compared to the corresponding month of previous year,” the Commerce and Industry Ministry said.
“Looking ahead, while global commodity prices, including crude oil continued to soften in the ongoing month, the uptrend in domestic prices of most food items as well as an unfavourable base is projected to lead to a turnaround in the WPI to a marginal 0.1% inflation in November after a gap of seven months,” reckoned Aditi Nayar, chief economist at ICRA