A first in 25 months, wholesale food prices rise 11.6%

Inflation in India’s wholesale prices hardened to a four-month high of 2.4% in October, from 1.84% in September, led by 11.6% acceleration in food prices, the first double digit uptick in 25 months, compared to 9.5% in the previous month.

Vegetable prices soared over 63%, compared with the 14-month peak inflation of about 49% recorded in September. Potato prices rose 78.7%, marginally higher than 78.1% in the previous month, while onion inflation halved from 78.8% in September to 39.25% in October.

The Wholesale Food Index jumped 3% on a month-on-month basis. The Commerce and Industry Ministry attributed the rise in wholesale price inflation to an increase in prices of food articles, manufacture of food products, other manufacturing, manufacture of machinery & equipment, manufacture of motor vehicles, trailers & semi-trailers.

Inflation in manufactured products also picked up to 1.5% in October from 1% in the previous two months, while primary articles inflation more than tripled from August to touch 8.1%. However, fuel and power remained in deflationary territory, with prices 5.8% below last October’s levels, as opposed to a 0.5% decline in August and about 4% year-on-year dip in September.

Food inflation alone pushed up the overall uptick in the Wholesale Price Index, reckoned ICRA senior economist Rahul Agrawal. Wholesale food inflation is expected to remained elevated this month as well, but print under 10%, he said, citing favourable base effects.

“The available data on daily wholesale prices points to a softening in the YoY inflation prints across 13 of the 22 items in November 2024 so far vis-à-vis October 2024, even as onions and edible oils remain a concern,” he said.

Acuité Ratings and Research chief economist Suman Chowdhury said manufactured products inflation reflects a “limited pass through” of costs by producers amidst the slowdown in demand conditions seen in the July-September quarter.