Inflation cools to 2.6% on lower food prices

Wholesale inflation drops to 2.6% in September as food prices soften

India's wholesale inflation cools to 2.6% YoY in September led by food

The primary articles inflation was at (-) 0.2% in April-September FY2018 from 4.7% in April-September FY2017, while fuel products inflation increased to 9.5% from (-) 10.3%. The wholesale inflation rate was at 1.36% during September 2016.

Inflation of primary articles dipped to 0.2% in September 2017 from 2.4% in August 2017.

According to data released here by the Commerce Ministry, the WPI, with the revised base year of 2011-12, eased from 3.24 per cent in August.

On Thursday, data released by the government showed that retail inflation remained flat at 3.28 percent in September, as food prices remained steady, while fuel and housing prices witnessing modest growth during the month. The index for textiles sub-group rose by 0.6 per cent to 113.4 from 112.7 for the previous month due to higher price of texturised and twisted yarn (2 per cent each) and weaving & finishing of textiles, manufacture of cordage, rope, twine & netting and cotton yarn (1 per cent each).

"The rate of inflation based on WPI Food Index consisting of "Food Articles" from Primary Articles group, and "Food Product" from Manufactured Products group decreased from 4.41% in August to 1.99% in September", the statement said.

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Prices of vegetables dropped to 15.48 percent, from 44.91 percent a month ago. The inflation for manufactured products moved up to 2.7% in September 2017 from 2.6% in August 2017. In egg, meat and fish segment, the rate of price rise was 5.47 per cent.

"We see a moderation in the rate of inflation led by easing of prices in case of food articles", Pankaj Patel, President of FICCI said. "The correction in vegetable prices was the chief driver of the decline in primary food inflation to 2.0% from 5.8%", ICRA said in a note.

Prices of some vegetables, such as tomatoes, which had risen sharply in July, corrected in September.

RBI had on 4 October left interest rates unchanged, citing upside risks to inflation.

Commenting on the WPI data, Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in a statement: "When taken together with the CPI (consumer price indexed) inflation number, which has remained unchanged during the month, the data would help boost sentiments".

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