WPI Inflation soars in March 2024, onion, potato prices surge
As a result, while food products, motor vehicles, rubber and plastic products and other manufacturing items witnessed a month-on-month increase in their prices, medicinal chemicals, textiles and pharmaceuticals saw a dip in their prices.
Wholesale inflation inched up to 0.53% in March, as compared to February, when it stood at 0.20%. Figures for wholesale inflation rates were released last week, showing a drop to the lowest levels in nine months in March. However, retail inflation for food items remained at 7.68% during March.
According to figures from the Ministry of Commerce, the wholesale inflation rate for onions was 29.22 percent in February, which surged by 56.99 percent in March. There are concerns that onion prices may continue to rise until the kharif crop is again harvested next season.
Similarly, wholesale inflation for potatoes rose by 52.96% in March, which was 15.34 percent higher than in February. Wholesale inflation for food items stood at 4.65% in March, up from 4.09% in February. As per the government’s press release, increase in prices of food articles (1%), minerals (0.58%), non-food articles (0.44%), electricity (0.13%) and mineral oils (0.13%) were the main reasons for the spike in wholesale inflation rates, right before the country goes to poll in the Lok Sabha elections, 2024.
However, the price of coal (-0.15%) declined in March as compared to the previous month. As a result, while food products, motor vehicles, rubber and plastic products and other manufacturing items witnessed a month-on-month increase in their prices, medicinal chemicals, textiles and pharmaceuticals saw a dip in their prices.
As per the ministry’s press release, the annual rate of inflation of Manufactured Products group of WPI increased to (-) 0.85% in March 2024 as compared to (-) 1.27% in February 2024. For FY24, the wholesale inflation index fell 0.7%, as compared to a 9.41% rise a year ago.
Notably, WPI, or the Wholesale Price Index tracks the changes which take place in the prices of goods and services traded or sold in bulk by various wholesale businesses or other companies. In essence, it is a measure of retail prices. The CPI, or the Consumer Price Index, tracks changes in prices of goods and services generally availed by consumers.