India's December Wholesale Inflation Hits 7-Month High On Costlier Food

Tuesday,   14-Jan-2020   12:32 PM (IST)

India’s wholesale price inflation rate quickened to 2.59% in December from a year earlier, recording the fastest pace of price gain since May and accelerating for the second straight month, driven by costlier food prices, government data showed today. Wholesale food index rose to 11.05% in December, faster than a 9.02% expansion in the previous month. Wholesale prices of essential food items such as vegetables spiked 69.69% in December from the earlier month’s 45.32% annual pace of expansion. Price of most vegetables, including onion, potatoes and tomatoes, have spiked in recent months following winter rains in some parts of the country that added to supply woes. Onion prices soared 455.83% in December, versus a 172.30% spike last month. Wholesale potato prices jumped 44.97% in December versus an 8.51% contraction in September. Sugar prices increased 4.71% in December from 3.13% expansion in November. Milk prices rose 2.64% from 1.60% gain in the previous month. Wholesale prices of manufactured products, which has a 64.23% weightage in the WPI, fell 0.25% from a year earlier in December, narrower than an annual 0.84% contraction in November. Fuel and power costs fell 1.46% from a year earlier in December, the pace sharply slowing from a 7.32% annual decrease in November.  Crude oil prices, India’s costliest import, rose for a second straight month in December, with the benchmark Brent crude oil contract gaining 5.7%, also posting its biggest monthly rise since April. It traded in a $60.30-$68.99 per barrel range last month. India imports over 80% of its crude oil requirements. The government revised October’s wholesale annual inflation reading to nil from an initial estimate of 0.16% expansion.