Wholesale price rise at 4-month low of 1.3% in August

India's wholesale inflation drops to 1.31% in August, driven by lower food prices and mild deflation in fuel costs.

Inflation in India’s wholesale prices slid to a four-month low of 1.31% in August from 2.04% in July, aided by a slight moderation in the pace of price rise in food items and manufactured goods, and fuel and power costs slipping into a mild deflation of 0.7% from a 1.7% uptick in the preceding month, government data released on Tuesday (September 17, 2024) showed.

Food inflation eased from 3.6% in July to 3.3% in August, but this was again spurred by a year-on-year decline in prices for vegetables and eggs, meat and fish, which dropped 10% and 0.7%, respectively.

Base effects played a key role in this moderation as vegetable prices were up 48.4% last August. Inflation in primary food articles stood at 3.1% from a steep 11.4% a year ago, but several items witnessed a sharp spurt in prices despite last year’s high base.

Cereals inflation remained firm at 8.44%, with paddy prices up 9.1% and wheat inflation accelerating to 7.3% from July’s 7% rate. Pulses inflation was a sharp 18.6, while potato inflation picked up further to 78% in August.

The price rise in onions stayed sharp at 65.75%, although below the 88.8% rise recorded in July. Inflation in fruits picked up to 16.7%, from 15.6% in July, while milk inflation offered some respite at 3.5%, compared with 8.5% a year ago.

The Food Index was down 1.13% from July levels, compared with the six-month high of a 2.7% sequential recorded in July.

Manufactured products’ prices reversed a three-month rising streak with an inflation of 1.22% in August, from 1.6% in July. They were 0.07% lower on a month-on-month basis.