Wholesale inflation eases to 0.13% in September as food prices fall sharply

WPI for August

India’s wholesale inflation (WPI) eased to 0.13 percent in September, down from 0.52 percent in August, driven by a sharp fall in food and fuel prices, according to data released by the commerce ministry on Tuesday.

The decline was led by a steep correction in primary food articles, vegetables, and crude petroleum, even as price growth in manufactured goods remained broadly stable.

Food inflation—the most volatile component of the index—slipped further into deflation, falling 1.99 percent year-on-year in September compared with a 0.21 percent rise in August.

Vegetable prices dropped 24.4 percent, led by a massive 63.8 percent fall in onion prices and a 42.2 percent decline in potatoes. Cereal prices moderated as well, with both paddy and wheat showing slower price growth.

Pulses continued to remain in deep deflation, falling 17.2 percent, while fruit prices contracted 4 percent.

The only exception in the food basket was protein items—meat, fish, and eggs—where inflation rose modestly to 1.27 percent from 0.06 percent a month earlier, reflecting steady demand despite easing prices elsewhere.

The fuel and power category also helped pull overall inflation lower, contracting 2.58 percent in September compared with a 3.17 percent fall in August.

Crude petroleum prices stayed in negative territory at –7.45 percent, while LPG prices declined nearly 8 percent, offsetting global price volatility. Petrol and diesel inflation also remained subdued.

Inflation in manufactured products, which account for the largest share of the WPI basket, remained largely steady at 2.33 percent, compared with 2.55 percent in August.

Within manufacturing, food product inflation slowed sharply to 4.56 percent from 7.15 percent a month earlier, thanks to cooling edible oil and processed food prices. Sectors such as chemicals, pharmaceuticals, and basic metals recorded modest gains, while non-metallic minerals and cement saw firm price trends.

The primary articles index fell 3.32 percent, reflecting weaker agricultural prices. However, minerals were an exception, with inflation rising to 6.77 percent, the highest in six months.

Economists expect wholesale inflation to stay subdued in the coming months, aided by a favourable base, soft food and fuel prices, and moderating global commodity trends.