Wholesale inflation eases in June, stays above 15% for third month

Wholesale inflation, measured through wholesale price index (WPI), has marginally declined to 15.18% in June, compared with 15.88% in May, shows government data shared by the commerce ministry on Thursday. WPI inflation in the food index during June stood at 12.41%, climbing up from 10.89% in May and 9.13% in April.

While WPI inflation has come down for the first time in four months, it remains in the 15% territory for the third month in a row. While retail inflation has been a roller coaster ride, coming down from historic highs in certain months, wholesale inflation continues to be sticky, raising concerns.

“The high rate of inflation in June 2022 is primarily due to rise in prices of mineral oils, food articles, crude petroleum and natural gas, basic metals, chemicals and chemical products, food products, etc. as compared to the corresponding month of the previous year,” Ministry of Commerce and Industry says.

For primary articles, wholesale inflation during the month under review was 19.22%, easing slightly from 19.71% in May. Prices of crude petroleum and natural gas increased 6.59%, while that of food articles grew 2.40% in June as compared to May. Prices of non-food articles and minerals came down 2.06% and 9.04%, respectively during the month.

Wholesale prices in the fuel and power segment continued to remain elevated, on account of soaring crude oil prices, with wholesale inflation for the category at 40.38% in June, compared to 40.62% in May. The rise came as prices of mineral oils increased 0.98% in June.

For manufactured goods, wholesale inflation was 9.19%, coming down from 10.11% a month ago. Out of the 22 NIC two-digit groups for the segment, 14 groups witnessed increase in prices while 8 groups saw a decline. The increase in prices was in commodities including chemical and chemical products, other non-metallic mineral products, electrical equipment, motor vehicles and textiles. The product groups that witnessed decrease in prices included basic metals, food products, and other manufacturing and furniture.

Meanwhile, India’s retail inflation slightly moderated to 7.01% in June 2022 from 7.04% in May this year, showed government data shared earlier this week. The headline inflation print was at 6.26% in the same month last year, reveals data shared by the National Statistical Office (NSO).

This marks the sixth month that retail inflation has remained above the tolerance band of 2-6% recommended by the Reserve Bank of India (RBI).

Inflation in food basket further declined to 7.75% in June, from 7.97% in May, following year-on-year decline in prices of eggs and pulses. Prices in the food basket, however, remained higher in consecutive terms for most products.