WPI September 2024: Inflation Climbs Amidst Surging Food Prices

The Wholesale Price Index (WPI) for September 2024 shows an annual inflation rate of 1.84%, primarily driven by increased food and manufacturing costs. The overall WPI index rose slightly, influenced by significant shifts in primary articles and manufactured products, despite a declining trend in fuel prices.

The latest data from the Ministry of Commerce and Industry reveals that the Wholesale Price Index (WPI) for September 2024 has recorded an annual inflation rate of 1.84%, calculated based on the 2011-12 base year. This positive shift in inflation is largely due to rising prices in food articles, food products, and manufacturing sectors, which include motor vehicles, trailers, machinery, and equipment.

In a detailed breakdown, the index for all commodities reached 154.6 in September, marking a modest monthly increase from 154.5 in August. Compared to last year, there is a noticeable rise in the annual inflation rate, escalating from 1.31% in August to 1.84% in September.

The Primary Articles category, holding a significant weight of 22.62% in the index, saw the rate increase by 0.41% to 195.7. Annually, inflation in this segment surged to a notable 6.59% from 2.42% in August, with mineral, non-food, and food prices all contributing to this hike. Meanwhile, crude petroleum and natural gas prices saw a notable decrease of 5.74%.

The Fuel and Power segment, making up 13.15% of the WPI index, experienced a reduction of 0.81%, bringing the index to 146.9 from 148.1. The annual inflation here plummeted further into negative territory, reaching -4.05% compared to the previous month's -0.67%, influenced by a drop in mineral oil prices, despite a slight increase in electricity costs.

Manufactured Products, the largest segment with a 64.23% weight, experienced a small rise of 0.14% in September. However, annual inflation slightly eased to 1.00%, with about ten sub-categories, including food products and electronic items, showing price increases. Conversely, areas such as basic metals and textiles recorded price declines.

A key driver of the overall inflation was the spike in the WPI Food Index, which rose to 195.3 from 193.2 in August, pushing annual food inflation to 9.47% from 3.26%, underscoring a significant escalation in food costs.

The report also noted the last six months' trends, highlighting growth in wholesale prices in April and July, a decline in August, followed by a slight September recovery. The Primary Articles category saw marked growth in April and July, a drop in August, while the Fuel and Power segment largely contracted apart from a July increase. Manufactured Products showed minor fluctuations during this period.

Compiled with an 86.3% weighted response rate for September 2024, the final July data relied on a higher 96.0%. Future figures remain subject to revisions under the existing policy, with October 2024's WPI expected to be released on November 14, 2024.

(With inputs from agencies.)