Wholesale Food Inflation Eases To 3.60% In April

Wholesale food inflation eased to 3.60 per cent in April, from 5.49 per cent in the previous month, government data showed on Thursday. The government did not release an overall provisional figure for the Wholesale Price Index (WPI) for the month of April. Wholesale inflation - or the rate of increase in wholesale prices - is determined by the Wholesale Price Index. The latest reading comes at a time when the country is in the third phase of an extended nationwide lockdown to curb the spread of the coronavirus (COVID-19) pandemic, which has pushed an already slowing economy into a standstill.

The Commerce Ministry released data on price movements in select WPI categories for April in view of "limited transactions of products in the wholesale market in the month" on account of the COVID-19-induced lockdown.

Price changes in all commodities constituting the WPI could not be computed "due to non-availability of manufactured product group index", it said.

"Food inflation displayed a divergent trend at the wholesale and retail levels," said Aditi Nayar, principal economist at credit ratings agency ICRA. The decline in WPI food inflation is encouraging and suggests that the spike in retail food inflation was largely driven by the lockdown-related disruption, she added.  

"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," Ms Nayar added. 

Separate data on Monday showed that consumer inflation - determined by the Consumer Price Index - came in at 5.84 per cent in March, remaining at the lowest level recorded in four months.

Still, inflation stayed above the Reserve Bank of India's medium-term goal of 4 per cent for the sixth month in a row.

The RBI tracks consumer inflation primarily while formulating its monetary policy. Some economists say consumer inflation - also known as retail inflation - might not remain the driver of policy in view of the coronavirus outbreak.