Representative image of the rise in inflation figures was driven largely by spikes in the prices of food items and vegetables.
Credit: iStock Photo
New Delhi: India’s wholesale price inflation rose to a four-month high of 2.36 per cent in October from 1.84 per cent recorded in September, largely due to a sharp jump in the prices of food items, especially vegetables, and manufactured products, official data showed on Thursday.
Wholesale food inflation surged to a 28-month high of 11.59 per cent in October , compared with 9.47 per cent in September.
Prices of household vegetables like tomatoes, onions and potatoes have gone through the roof. Tomato surged by 239.4 per cent in the wholesale market year-on-year during October. The price of onion rose by 39.3 per cent and potato became costlier by 78.7 per cent, as per data released by the Commerce Ministry.
The other key driver of the Whole Price Index (WPI) based inflation in October was edible oils. The price of edible oil surged by 20.2 per cent year-on-year in October, likely due to the increase in import duty on palm oil.
Wholesale fruit inflation swung up to 13.6 per cent in October 2024 from a three-month low of 12.2 per cent in the preceding month. These three items - vegetables, edible oils & fruits - were responsible for around three-fourth of the food inflation in October 2024, which alone pushed up the headline WPI print by 63 basis points (0.63 per cent) from September to October.
However, the inflation in other major segments such as core, energy and fuel & power kept the WPI inflation under control. In fact, fuel & power recorded a contraction in prices to the tune of 5.8 per cent in October, while prices for energy & minerals declined by 7.8 per cent.
“The overall global economic environment has been under the purview of various risks which has kept the trajectory of commodity prices range bound. This has worked favourably for the Indian economy by keeping input cost inflation low despite pressures emanating from the food front,” said Paras Jasrai, senior economic analyst at India Ratings.
“Going forward, food inflation is expected to remain around 10 per cent, however, core inflation is expected to be low,” he added.
The core WPI inflation (non-food manufacturing) increased marginally 0.1 per cent on a sequential basis in October, and came in at 0.3 per cent.
“We expect the manufacturing inflation continuing uptrend, while the better harvest shall ease supply concerns of food items. Fuel inflation remaining in negative territory has been a positive factor thus containing the spread of inflation across categories,” said Sujan Hajra, chief economist at Anand Rathi Shares and Stock Brokers.
As per the official data released earlier this week, retail inflation surged to a 14-month high of 6.21 per cent in October. The jump in retail as well as wholesale inflation would further delay monetary policy easing by the Reserve Bank of India (RBI).
“Any change in policy rates by the central bank looks unlikely in FY25,” said Jasrai.