India's October Wholesale Inflation Rate Eases To Over 3-Year Low

Thursday,   14-Nov-2019   12:50 PM (IST)

India’s wholesale price inflation rose 0.16% on year in October, the slowest pace of price gain since June 2016 and easing for a second month, as prices of manufactured products and fuel contracted further, government data showed today. The October reading was higher than a Reuters poll for no change in the index, but eased from 0.33% expansion in September. Wholesale food index rose to 7.65% in October, faster than a 5.98% expansion in the previous month. Wholesale prices of manufactured products, which has a 64.23% weightage in the WPI, fell 0.84% from a year earlier in October, versus an annual 0.42% contraction in September. Further contraction in basic metals and chemicals and chemical related products costs led to the wholesale price of manufactured items to decline for a second straight month. Fuel and power costs fell 8.27% from a year earlier in October, as compared with a 7.05% annual decrease in September. Crude oil prices, India’s costliest import, fell in October, with the benchmark Brent crude oil contract losing 0.9%. India imports over 80% of its crude oil requirements. Wholesale prices of essential food items such as vegetables jumped 38.91% in October from the earlier month’s 19.43% annual pace of expansion. Price of most vegetables, including onion and tomatoes, surged following flooding in some parts of the country that disrupted supplies. Onion wholesale prices surged 119.84% in October, versus a 122.40% spike last month.  Sugar prices increased 3.29% in October, slower than 4.65% expansion in September. The government revised August’s wholesale annual inflation reading to 1.17% from an initial estimate of 1.08%. Today’s data are provisional and can be revised later.