Onion, Vegetable Prices Drive Wholesale Inflation To 16-Month High

India's wholesale inflation maintained its upward trend to reach a 16-month high in June, led by higher prices of vegetables, alongside higher prices of manufactured products.

The Wholesale Price Index rose 3.36% during June, compared with 2.61% in the previous month, showed data released by Ministry of Commerce and Industry on Monday.

On a sequential basis, wholesale prices rose by 0.4% in June, after a rise of 0.3% in May.

WPI core inflation grew by 0.9% in June, compared with 0.4% in May.

The jump in the WPI inflation was broad-based, and along expected lines, displaying the third consecutive month of a sizeable sequential step up, said Aditi Nayar, chief economist at ICRA. Looking ahead, the headline WPI inflation is expected to dip to about 2.0% in July 2024, driven by a favourable base, as well as some cooling in global commodity prices, she added.

WPI Inflation Internals (Year-On-Year)

• Inflation in manufactured products—the largest component of the index—rose 1.43%, compared to a contraction of 0.78% in May. Within manufactured products too, food products led, with prices rising by 4.3% in June, after a rise of 2.7% in May.

• Primary-article inflation was 8.8%, compared to 7.2% in the previous month.

• Food article inflation rose 10.9% in June, compared to a rise of 9.8% in May.

• Within food articles, vegetables saw the sharpest rise at 38.8%, compared to 32.45 in the previous month.

• Onion prices rose by 93.4% in June, compared to 58.1% in May.

• Non-food articles continued to see disinflation at 2%, against 4% disinflation in the previous month.

• Fuel and power inflation increased by 1.03% in June after rising by 1.35%.