📷 Image Credits: The Hindu
India experienced a significant surge in wholesale price inflation, reaching 3.36% in the month of June, marking the highest level in 16 months. This increase was primarily driven by food inflation, with a notable rise in prices of vegetables, cereals, and fruits. The spike in food prices also contributed to a considerable uptick in retail inflation, reaching 5.08% in June.
The latest data released by the government showed that food inflation soared to 8.7% in June, with the prices of items like vegetables, cereals, and fruits witnessing substantial increases. Additionally, manufactured products prices nearly doubled, rising to 1.43% from the previous month.
On a month-on-month basis, wholesale prices saw a 0.4% increase in June, with the Food Index experiencing the fastest growth so far in the year. The rise in food prices has been a significant contributing factor to the acceleration of headline retail inflation to 5.08% in June.
In terms of specific food items, prices of vegetables, particularly onions and potatoes, saw significant hikes, with inflation rates reaching 93.4% and 66.4% respectively. Pulses, paddy, fruits, and cereals were other key contributors to the rise in primary food articles inflation to 10.9% in June.
Manufacturers also faced higher input costs, with prices of minerals and crude petroleum & natural gas witnessing significant increases. The rise in mineral prices was the highest in the past five months, while petroleum and natural gas prices saw the steepest increase in at least six months.
An increase in crude oil prices might continue to exert upward pressure on the headline WPI inflation in the coming months, as the prices have been volatile due to supply-demand mismatches. The sharp rise in food and manufacturing prices has put pressure on both wholesale and retail prices, indicating potential challenges in managing inflation levels moving forward.
