Cheaper vegetables helped ease food price rise to 1.5% despite accelerated uptick in pulses, wheat, cereals, fruits, milk prices; onion prices quickened to cross 55% in September from 31.4% in August

India’s wholesale prices stayed in deflationary mode for the sixth month in a row this September, albeit only fractionally with inflation at -0.26% compared to -0.52% in August.

Wholesale price inflation had been 10.55% in September 2022, creating a high base effect. Price rise in primary articles and food items eased sharply to 3.7% and 1.5%, respectively, from 6.34% and 5.62% in August. However, within food items, the price rise in onions accelerated to cross 55% from 31.4% in August, while inflation in pulses sped to 17.7% from 10.45% in the previous month.

Milk inflation hit a three-month high of 8.6%. Vegetables’ prices, which had risen a sharp 67.6% and 48.4% in July and August, slid 15%, bringing some relief, but the price rise in cereals and wheat hardened to 7.3% and 6.3%, respectively.

The surge in global oil and gas prices led to a sharp rebound in crude petroleum and natural gas inflation which hit an 8-month high of 15.6% from -1.9% in August.

Despite a sequential rise in food prices so far this month, rating agency ICRA expects overall wholesale prices to remain in deflationary territory in October as well.

Source : The Hindu Sep 17 2023