Decline in food prices eases WPI to 3.75% in September

Inflation was at 3.74 per cent in August this year and at (-) 4.59 per cent in September last year. Inflation in vegetables witnessed deflationary pressures and was recorded at (-)10.91 per cent in September.

By: ENS Economic Bureau | New Delhi | Published:October 15, 2016 1:44 am

Wholesale price-based index (WPI) inflation eased to 3.57 per cent in September as prices of food articles and vegetables declined. Inflation was at 3.74 per cent in August this year and at (-) 4.59 per cent in September last year. Inflation in vegetables witnessed deflationary pressures and was recorded at (-)10.91 per cent in September.

Inflation in this category had scaled a high of 28.45 per cent in July. This was aided by inflation data for onion, which was at (-)70.52 per cent. Pulses inflation continued to rule high at 23.99 per cent in September, according to the commerce ministry data. Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 73.31 per cent. Inflation in fruits rose 14.10 per cent during the month.

Overall, the food inflation basket showed good moderation with inflation remaining at 5.75 per cent in September, as against 8.23 per cent in August. “The month on month easing in food prices at the wholesale level was nearly twice the pace revealed by the retail data. This sequential easing combined with a favourable base effect cooled food inflation to a five month low in September 2016,” said Aditi Nayar, vice president & Senior Economist at
ICRA Limited.

Despite the flaring up of crude oil prices in the current month, the rating agency expects WPI inflation to remain contained below 4 per cent in October-December. WPI inflation is likely to rise to as much as 4.5 per cent in Jan-March 2017, it said.

WPI, which was in the negative zone from November 2014 to March 2016, had been rising for six months till August. Inflation for manufactured articles was at 2.48 per cent in September as against 2.42 per cent in August. Inflation rate for sugar was at 32.92 per cent and that for petrol was 1.25 per cent.

The inflation for July has been revised upwards at 3.72 per cent, against the provisional estimate of 3.55 per cent. The inflation in September is in sync with the retail inflation which eased to a 13-month low of 4.31 per cent in the month.

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