In January, wholesale prices rose at three-month low pace of 0.27%

This is the third month in a row that the Wholesale Price Index (WPI) has recorded positive growth after a seven-month deflationary streak, but January’s print reflects the mildest price rise since November.

Electricity prices rose 3.3% in January as compared to December 2023 levels. | Photo Credit: K Ananthan

India’s wholesale price inflation moderated to 0.27% in January from 0.73% in December, with manufactured products prices dropping 1.1% year-on-year and the price rise in primary articles and food items easing to around 3.8% from over 5% in the previous month.

This is the third month in a row that the Wholesale Price Index (WPI) has recorded positive growth after a seven-month deflationary streak, but January’s print reflects the mildest price rise since November. 

“Positive rate of inflation in January, 2024 is primarily due to increase in prices of food articles, machinery & equipment, other manufacturing, minerals, other transport equipment etc.”, the Commerce and Industry Ministry said in a statement.

On a month-on-month basis, the WPI reading was 0.33% below December levels while the Wholesale Food Index was down 1.06% following a 2.18% sequential dip in the previous month. Fuel and Power prices were 0.5% lower than January 2023 levels, but this marked a moderation from the last two months’ reading of -4.1% and -2.4%. Electricity prices rose 3.3% in January as compared to December 2023 levels.

The rate of inflation in primary food articles eased to a three-month low of 6.85% from 9.4% in December, with slight declines recorded in most items, including cereals, whose inflation rate eased to 4.1% in January from 5.9% in the previous month. Fruits inflation dropped to a five-month low of 1% from 4.6% a month earlier.

However, overall inflation rates remained high for quite a few food items – Onion inflation was 29.2%, down from 91.8% in December; Vegetables prices were up 19.7% (down from 26.3%); Pulses inflation was at a five-month low but still at 16.1%. Paddy inflation dropped from 10.5% in December to 9.6% in January. Wheat and potato prices dropped 3.1% and 8.4%, respectively, in January, while milk inflation eased to 5.4%.

While the disinflation in manufactured products’ increased from -0.7% in December to -1.13%, nine of 22 product groups clocked an increase in prices, while price levels were constant for one segment. “Some of the important groups that showed month-over-month increase in prices are machinery & equipment; textiles; beverages; motor vehicles, trailers & semi-trailers; rubber & plastics products,” the Ministry said, while prices had dropped for food products, basic metals, chemicals and some non-metallic mineral products.