Wholesale Food Prices Surge in May, WPI Food Index Jumps from 5.52% to 7.40%.
Wholesale food prices experienced a significant increase in May, as indicated by official data showing the Wholesale Price Index (WPI) for food rising from 5.52 per cent in April to 7.40 per cent in May. This surge was observed across various food items including cereals, paddy, pulses, vegetables, potato, onion, and fruits.
The overall wholesale inflation in India, based on the Wholesale Price Index, rose to 2.61 per cent in May compared to 1.26 per cent reported in April. This marks the seventh consecutive month of positive wholesale inflation after remaining in the negative zone for seven months until October. The increase in April was primarily due to rising prices of food articles and minerals.
The inflationary trend in May was also triggered by an increase in prices of manufactured food products, crude petroleum and natural gas, mineral oils, and other manufacturing sectors. Economists often view a slight increase in wholesale inflation positively as it typically incentivizes goods manufacturers to produce more.
Looking ahead, it is expected that inflation in food articles will rationalize by September/October 2024 as many kharif crops enter the market and supplement the existing supply. This expectation is based on the government’s efforts to strengthen supply chains and the anticipation of above-normal southwest monsoon.
The government releases wholesale price index numbers on a monthly basis, compiled with data received from institutional sources and selected manufacturing units across the country. Meanwhile, India’s retail inflation rate softened marginally in May, continuing its moderation trend, although food prices remain a concern for policymakers.
