Wholesale inflation rises to 6-month high of -0.26% in September

One basis point is one-hundredth of a percentage point.

However, like the general index of the Consumer Price Index, the all-commodity index of the WPI also fell month on month (MoM) in September but by a smaller magnitude of 0.59 percent as against 1.1 percent for the CPI. An unfavourable base effect, however, more than cancelled out the sequential fall in prices, which were led by those of food items.

Month-on-month gains in the price index are an indication of price pressures.

In September, the food index of the WPI was down 4.46 percent MoM, adding to the 1.38 percent MoM decline in August, as tomato prices came down sharply. Specifically, the index for tomatoes, which rose 56 percent and 318 percent MoM in June and July, respectively, slumped 73 percent in September after having fallen by 22 percent in August. The overall index for vegetables was down 37 percent MoM in September.

What will be of concern to the government and the Reserve Bank of India is that almost all other food items saw a sequential rise in prices, including cereals (1 percent), pulses (6 percent), fruits (5 percent), and milk (0.7 percent). In addition, the fuel and power group of the WPI rose more than 2 percent MoM, with the index of manufactured products, which accounts for nearly two-thirds of the WPI, rising sequentially for the second month in a row in September.

Among manufactured products, price pressures were most pronounced for basic metals, with edible oils at the other end of the spectrum.