Food inflation drives Sept WPI to 7-month high of 1.32%

NEW DELHI: India’s wholesale inflation firmed up to a seven-month high of 1.32% in September, primarily driven by food items, after turning positive in August for the first time since March.

Wholesale price index (WPI) inflation was 0.16% in August. In September, inflation in food articles advanced to 8.17% from 3.84% in the previous month, data released by the commerce and industry ministry showed on Wednesday. WPI was 0.33% in September 2019.

The annual rate of inflation based on WPI Food Index, which comprises 'food articles' from primary articles group and 'food product' from manufactured products group, increased to 6.92% in September from 4.07% in August. The government also revised the wholesale inflation for July to -0.25% from -0.58% earlier.


“The WPI for September have been compiled at a weighted response rate of 72% while the final figure for July is based on the weighted response rate of 90.54%,” the ministry said.

Inflation in vegetables rose to 36.54% in September while that in potato skyrocketed to 107.63%. However, onions witnessed a 31.64% deflation.

As per the release, primary articles inflation was 5.1% in September against 1.6% in August while inflation for manufactured items rose to 1.61% from 1.27% in the trailing month.

“The disaggregated data did not provide much comfort regarding the inflation outlook, and today's data further cements the likelihood of an extended pause from the Monetary Policy Committee,” said Aditi Nayar, principal economist at ICRA.

Official data released on Monday showed India’s retail inflation accelerating to 7.34%, exceeding the target rate, in September from 6.69% on dearer food inflation that reached the double-digit level of 10.68%.

Nayar said despite the appreciation in the Rupee, the core-WPI inflation increased to a 16-month high of 1% in September and appears set to double over the next quarter.