India Wholesale Price Inflation Rises To 1.84% In September; Food & Manufacturing Prices Drive Increase

India's wholesale inflation climbed to 1.84% in September 2024, according to the latest Wholesale Price Index (WPI) data released by the government on Monday, October 14. This marks an increase from the previous month's figure of 1.31% in August and 2.04% in July.

The government attributed the September inflation rise to higher prices in key sectors such as food articles, food products, other manufacturing industries, motor vehicles, trailers, semi-trailers, and machinery and equipment. These price hikes have contributed significantly to the overall WPI inflation.

The WPI is a key indicator used to measure inflation at the wholesale level, tracking price changes of goods sold in bulk between companies. It contrasts with the Consumer Price Index (CPI), which measures the cost of goods and services purchased directly by consumers. The WPI focuses on factory gate prices, assessing how much manufacturers charge distributors, while the CPI reflects retail prices.

The WPI is released monthly by the Ministry of Commerce and Industry and categorizes commodities into three broad groups: primary articles, fuel and power, and manufactured products. Each of these categories is further subdivided to capture detailed price movements within the economy.

In September 2024, the prices of several primary articles showed an upward trend, with minerals seeing a 1.83% increase, non-food articles rising by 1.31%, and food articles gaining 0.86%. Additionally, electricity prices grew by 1.34% during the month.

However, some sectors witnessed price declines. For instance, crude petroleum and natural gas prices dropped by 5.74%, while mineral oil prices fell by 1.72%. These declines helped temper the overall increase in wholesale inflation.

The price trends within the manufactured products segment presented a mixed picture. Out of the 22 National Industrial Classification (NIC) two-digit groups for manufactured products, 10 groups saw price increases, while nine groups experienced declines. Prices in three groups remained unchanged compared to the previous month.

Sectors that reported month-over-month increases in prices include food products, other manufacturing sectors, non-metallic mineral products, computer and optical products, and wearing apparel. On the other hand, prices declined in sectors like basic metals, textiles, motor vehicles, trailers and semi-trailers, chemicals and chemical products, and fabricated metal products.

The September inflation surge can be largely attributed to the rise in food and manufacturing prices. The continued upward pressure in food-related sectors, driven by supply chain disruptions and seasonal factors, contributed significantly to the rise in wholesale prices. In contrast, declines in the prices of crude petroleum, natural gas, and certain manufactured products provided a slight cushion against a more substantial inflation increase.