India’s Wholesale prices slipped into deflationary territory in April to a 34-month low with the pace of price rise contracting 0.92%, led by a 2.42% year-on-year decline in manufactured products’ prices and a sharp dip in fuel, power and food inflation rates. Wholesale inflation had hit 15.4% in April, which was a record high at the time.
On a month-on-month basis, the Wholesale Price Index (WPI) remained unchanged, with the fuel and power index declining 2.7% from March 2023 levels. This was offset by an increase in primary articles and food inflation to 1.3% and 0.9% —both of which were the highest sequential upticks in at least six months.
“Decline in the rate of inflation in April, 2023 is primarily contributed by fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products and paper & paper products,” the Commerce and Industry Ministry said.
Wholesale price inflation had slowed to 1.34% in March, marking the most benign inflation rate since October 2020. April’s deceleration in prices marks the 11th straight month of moderating wholesale inflation since after it scaled an all-time high of 16.6% in May 2022.
Last month, fuel and power inflation slid to just 0.9% from about 9% in March, with LPG prices dropping 10.5% year-on-year, and petrol and diesel inflation easing to around 1.5% from 6.5% and 11.9% in March, respectively.
Vegetable prices continued to contract for the sixth month in a row on a year-on-year basis, but by a marginal 1.5% in April, while potato prices dropped for the third successive month, by 18.7%. However, compared to March, vegetable prices were up 4.5% and potato prices rose 14%.
Cereals inflation eased a bit from 9.5% in March to 7.7% in April, but prices were virtually unchanged from March levels. Paddy inflation saw a slight dip from 7.5% in March to 7.1% in April, but prices were 0.4% higher than March 2023.
Milk inflation hit a five-month low of 7.1%, while the pace of price rise in pulses accelerated to 5.55%, the highest in at least six months. While fruits slipped into deflation, contracting 4.5% from April 2022 levels, their prices surged over 8% from March 2023 levels.
With retail inflation hitting an 18-month low of 4.7% in April, the gap between the wholesale and consumer price rise has expanded from 432 basis points in March to 562 basis points in April. One basis point equals 0.01%.
