Wholesale price inflation drops to 2.04% in July

India's wholesale prices drop in July, with food prices cooling, but overall prices rise sharply, attributed to various factors.

Inflation in India’s wholesale prices dropped from a 16-month high of 3.4% in June, to 2.04% in July, with the rise in food prices cooling to 3.55% from 8.7% a month earlier. However, month-on-month gains in food prices accelerated to 2.7% from 2.1% in June, the highest pace in at least six months.

Overall prices rose 0.84% in July compared to June levels, marking the sharpest sequential uptick since April, and primary articles prices rose 3.13% from June, which is again the sharpest pace in at least half a year, according to data released on Wednesday (August 14, 2024).

In July 2023, wholesale prices had clocked a deflation of -1.23%. The decline in price rise in the food index in July was driven by vegetables whose prices fell 8.9% year-on-year, but that is relative to a 67.6% rise in prices recorded last July.

Eggs, meat and fish prices also fell 1.6% from last July, but there was no let up in most other food items’ price rise pace. Onion and potato prices rose a whopping 88.8% and 76.2%, respectively, while pulses were 20.3% pricier on top of a 9.6% rise reported last July.

On a year-on-year basis, inflation in fuel and power accelerated to 1.7% in July from about 1% in the previous two months, while manufactured products also reported a higher uptick of 1.6%.

The Commerce and Industry Ministry attributed the positive rate of inflation in July, “primarily to increase in prices of food articles, manufacture of food products, mineral oils, crude petroleum & natural gas, other manufacturing etc.”