Wholesale prices rise 3.39% year-on-year in October

Gaurav ChoudhuryMoneycontrolIndia’s wholesale inflation rose to 3.39 percent in October year-on-year, marginally lower than the previous month’s 3.57 percent. Food inflation moderated to four month low of 4.34 percent aided by fresh arrival of seasonal vegetable supplies.Wholesale prices of pulses, a common source of protein for most Indians, grew 21.80 percent in October compared with 23.99 percent in September.Wholesale vegetable inflation rates, a marker for price movements in bulk buys for traders, fell (-)9..97 percent in October mirroring the onset of new  vegetable supplies.Onion prices continue to remain muted, with wholesale inflation rate falling for the widely used bulb falling (-)65.97 percent in October from (-)70.52 percent in September.Potato prices, however, remain a concern with bulk prices rising 60.58 percent in October, lower than the previous month’s 73.31 percent, but still high enough given that it is widely consumed in India.Data for retail inflation for will be released later today in the evening. India’s retail inflation grew 4.31 percent in September, its slowest pace since August last year, bolstering hopes of another round of interest rate cut in the coming months.The consumer price index (CPI)-based retail inflation, which measures changes in shop-end prices, has fallen from a two-year high of 6.01 percent in July.Retail food price inflation fell to 3.88 percent in September-the lowest in a year--from 5.91 percent in August from 8.35 percent in the previous month as fresh supply of seasonal vegetables pushed down prices.Last month, the RBI cut its key lending-the repo rate-by 25basis points to 6.25 percent, as a newly set up panel felt that inflation levels were low enough to reduce loan rates.The RBI and the government have set a retail inflation target of 4 percent for the next five years.