April Wholesale Inflation At 0.34%, Turns Positive After 17 Months

After remaining negative for 17 months in a row, the wholesale inflation in April turned positive at 0.34 per cent on some recovery in the global commodity prices.

As per the data released on Wednesday, Wholesale inflation, WPI in April rose to 0.34 per cent as against (-)0.85 per cent in March.

The key factor has been rise in food inflation at 4.23 per cent in April as against 3.73 per cent in March. Food inflation was expected to rise following a sharp spike in food inflation under the CPI basket, which was released last week. Inflation in manufactured products rose to 0.71 per cent as against a negative 0.13 per cent in March.

Within the food basket pulses inflation remains high at 36.36 per cent. Also, the rate of increase in prices of potatoes in the wholesale market in April has been quite sharp at 35.45 percent as against 3.57 per cent in March.

Prices of onion remained lower in April but the vegetable prices were much higher as compared to March.

Vegetables inflation came in at 2.21 per cent vs negative 2.26 per cent.

Global crude oil prices have risen from the lows of $30 per barrel to around mid to high $40s now indicating a turnaround. As a result there has been an increase in the fuel & power inflation in April at -4.83 per cent vs -8.30 per cent in March; the only good news is that it still remains negative.

While the supply issues due to drought in some parts in the country also contributed to the rise in food inflation, the expectations of a good monsoon this year brings in hope for a better agricultural output that may ease some pressure on the food inflation front.