Wholesale food inflation slows to 3.60 pc in Apr

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SME Times News Bureau | 14 May, 2020
India's annual WPI Food Index eased to 3.60 per cent in April from a rise of 5.49 per cent in March, official data showed on Thursday.

However, the Centre did not release the complete set of WPI figures for April due to the Covid-19 outbreak and its impact on data collection.

In a note, the Office of Economic Adviser, Department for Promotion of Industry and Internal Trade said: "In view of the limited transactions of products in the wholesale market in the month of April 2020, due to spread of Covid-19 pandemic, it has been decided to release the Price Movement of selected Sub-groups/Groups of WPI, following the principles of adequacy.

"All Commodities of WPI could not be computed for April-2020 due to non-availability of manufactured product group index."

On a sequential basis, the expenses on primary articles, which constitute 22.62 per cent of the WPI's total weightage, declined (-) 0.7 per cent from 3.72 per cent in March.

"The index for this major group declined in April 20 by (-0.9 per cent) to 138.2 (P) from 139.5 (P) for the previous month. Prices of Minerals (2.3 pe r cent), Food Articles (0.7 per cent) and Non Food Articles (0.1 per cent) increased whereas prices of Crude Petroleum & Natural Gas (-24.7 per cent) declined as compared to the previous month."

Furthermore, on manufactured products' WPI, the statement said: "In view of the limited transactions of products in the market in the month of April 2020, it has been decided to release only limited numbers of major groups or sub-groups of manufactured products."

"Prices of Manufacture of Food Products (-0.29 per cent), Manufacture of Pharmaceuticals, medicinal chemical and botanical products (-0.15 per cent) and Manufacture of Basic metals (-0.84 per cent) provisionally declined whereas prices of Manufacture of Chemicals and Chemical Products (0.86 per cent) and Manufacture of Beverages (0.24 per cent) provisionally increased in April 2020 compared to the previous month."

The cost of the fuel and power category declined (-) 10.12 per cent against a fall of (-)1.76 per cent YoY.

Product-wise, the price of high-speed diesel declined per cent from (-)15 .39 per cent on a YoY basis, petrol deflated (-) 14.58 per cent and LPG (-)0 .67 per cent.

According to Aditi Nayar, Principal Economist, ICRA: "Food inflation displayed a divergent trend at the wholesale and retail levels in the month of April 2020. The decline in the WPI food inflation to 3.6 per cent in April 2020 from 5.5 per cent in the previous month is encouraging and suggests that the spike in retail food inflation was largely driven by disruption related to the lockdown."

"Vegetables were a major driver of the downtrend in the wholesale food inflation in April 2020, suggesting that their perishable nature amidst uncertain demand during the lockdown, contained the normal seasonal uptick seen with the rise in temperatures."