WPI at 4-month high in April; inflation rises to 3.18 % from 2.47% in March

The rate of Wholesale Price Index (WPI)-based inflation hit a four-month high in April, as food inflation beat deflationary trends from the month before and energy prices saw a sudden rise.

According to official data released on Monday, the WPI rose to 3.18 per cent in April, up from the 2.47 per cent rise seen in March and the 3.85 per cent rise in April last year.

Wholesale inflation had been falling since November, last year. In March, deflationary pressures on food articles meant that pulses and vegetables turned cheaper while falling prices of at least some commodities such as tomatoes, reflected farmers’ woes. This pulled down overall inflation even though oil inflation more or less neutralised the impact of food inflation.

Reports of aggrieved farmers dumping tomatoes from various parts of the country had followed. WPI is the best way to judge prices offered to farmers, given the statistical limitations.

However, food prices made a turnaround in April, rising by 0.87 per cent, after a deflation of 0.29 per cent in March. But price rise remained muted as compared to the 6-months preceding March.

However, prices for pulses, vegetables, wheat, eggs, meat and fish remained deflationary. While pulses have been witnessing deflation for months now, the rate of deflation, rose in April to 22.46 per cent, up from 20.58 per cent in March. Fall in prices also accelerated for eggs, meat and fish, as well as the category, saw prices drop by 2 per cent, as compared to the 0.82 per cent drop seen in the previous month.

Deflation in vegetables weakened to 0.89 per cent as compared to 2.70 per cent in March. The same was true for wheat, which saw a smaller deflation of 0.07 per cent in April as compared to the 1.17 per cent fall in prices in March.

Inflation in the energy category rose at a 4-month high rate of 7.85 per cent, from 4.70 per cent in the previous month. Within the category, prices of high-speed diesel rose twice as fast at 13 per cent in April, petrol prices rose by 9.45 per cent in April, up from the 2.55 per cent rise seen in March. But LPG prices continued to drop at a faster rate of 11 per cent.

Inflation in manufactured products remained at 3.11 per cent, up from 3.03 per cent in the month before.

The inflation data for February was revised upwards to 2.74 per cent from the provisional estimate of 2.48 per cent.