Business

Higher food prices drive wholesale inflation to 5.13%

However, market prices of most kharif crops have been lower than the minimum support price

Wholesale inflation accelerated to 5.13% in September, driven in large part by quickening inflation in the primary articles segment and stabilising food prices, according to official data released on Monday.

Growth in the Wholesale Price Index quickened in September from 4.53% in August.

Inflation in the primary articles category stood at 2.97% in September, up from a contraction of 0.15% seen in August.

Within primary articles, the food articles segment saw growth contracting by only 0.21% in September as compared to a contraction of 4.04% in the previous month.

“Sequentially, out of three major groups, primary articles inflation increased sharply in September and fuel and light, and manufactured inflation moderated in September,” Devendra Kumar Pant, Chief Economist and Senior Director (Public Finance), India Ratings & Research, said.

Non-food manufacturing

“Non-food manufacturing growth moderated consecutively in second month; even in CPI inflation the same trend was observed.”

“The prevailing market price for most kharif crops at major mandis has remained lower than the minimum support price (MSP), suggesting procurement hasn’t picked up,” Mr. Pant added. “The future inflation trajectory will depend on the response of mandi prices with respect to new MSP, and the movement of crude oil price and value of currency,” he added.

Inflation in the non-food primary articles segment accelerated to 4.17% in September from 3.48% in August, while that of crude petroleum and natural gas eased to 41.45% from 43.79% over the same period.

Inflation in the manufactured products sector eased in September to 4.22% from 4.43% in the previous month.

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Printable version | May 25, 2020 10:16:22 PM | https://www.thehindu.com/business/higher-food-prices-drive-wholesale-inflation-to-513/article25230121.ece

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