WPI inflation back in single digits after 18 months

India's annual rate of inflation based on the Wholesale Price Index (WPI) fell for the fifth straight month in October, ending its 18-month long double-digit streak.

Wholesale price inflation declined from a peak of 15.88% in May to 8.39% in October. WPI inflation was 10.7% in September and it stood at 13.83% in October last year.

The decline in the rate of WPI inflation was aided by a drop in prices of mineral oils, basic metals, fabricated metal products, textiles, other non-metallic mineral products, and minerals, according to the Ministry of Commerce & Industry.

In the fuel and power basket, WPI inflation eased to 23.17% in October as against 32.61% in September. For manufactured products, WPI inflation declined to 4.42% in October from 6.34% in September.

Inflation in primary articles marginally fell to 11.04% in October compared with 11.73% in September.

On a yearly basis, food articles' inflation rose to 8.33% from 0.06% in October 2021. Inflation in vegetables rose to 17.61% in October 2022 from -17.45% a year ago in the same period.

According to a survey by community social media platform LocalCircles, the monthly household expenditure on vegetables has almost doubled over the last two years. 76% of the respondents saw their monthly vegetable budget increase between 25-100% in the last two years.

To the question "How much has your monthly household expenditure on vegetables changed from 2020 to 2022?" 36% households said they are now spending 25-50% more to buy vegetables. Another 31% of the respondents put the increased expenditure to 50-100% and 9% to over 100% increase.

The survey also tried to capture the price rise in vegetables like tomato, onion and potato during the current year. The responses suggest that 1 in 2 households surveyed paid, on an average, more than ₹50/kg for tomato, ₹30/kg for onion and ₹25/kg for potato in 2022. To the question "What best describes the per kilogram price that your household paid on average for tomato, onion and potato this year", 27% of the respondents said they bought tomato for ₹60 or higher, onion ₹35 or higher and potato ₹30 or higher. Another 23% revealed that they have paid ₹50-60 for tomato, ₹30-35 for onion, ₹25-30 for potato. There were 7% who said the price range for tomato was ₹40-50, for onion ₹25-30 and between ₹20-25 for potato.

The findings of the survey indicate that the vegetable price rise at the consumer level could be higher than what is captured by the inflation data released by the National Statistical Office (NSO). According to NSO data, India's retail inflation rose in September to a five-month high of 7.41% year-on-year, driven by surging food prices. The food and beverage price index has over 45% weight age in NSO's monthly consumer price index.