Onions take food inflation to 71-month high; wholesale inflation at 0.58%

The Wholesale Price Index (WPI)-based rate of price rise in November rose 0.58 per cent, from 0.16 per cent in October, driven by a food inflation rate which was a 71-month high. 

Within food articles, onion saw an inflation rate of 172.3 per cent, from 119.84 per cent in October. Yet, WPI inflation remained below one per cent for a third month in a row, unlike that based on the Consumer Price Index (CPI), which rose to a 40-month high of 5.54 per cent. This was because only food items among the broader categories saw a rise in the inflation rate. The former’s weight in the WPI is 15.26 per cent; in the CPI, it is about 45 per cent.

And, the WPI inflation rate declined in non-food items, while staying stagnant in manufactured products, due to weak demand. Only processed food in manufacturing items saw a rise in the inflation rate, to 5.05 per cent from 3.7 per cent earlier. Fuel items showed a persistent deflationary trend. 

The food inflation rate in November, the 71-month high, was 11.08 per cent, from 9.8 per cent the previous month. 

Within this category, the rate in vegetables climbed to 45.32 per cent, from 38.91 per cent. That in pulses remained elevated, at 16.59 per cent after 16.57 per cent in October. 

“While the surge in vegetable prices will eventually reverse, the elevated inflation for pulses needs to be watched with caution, unless rabi sowing picks up pace,” said Aditi Nayar, principal economist at rating agency ICRA.

The core inflation rate (that seen in manufactured items sans food products) continued to be negative, at minus 1.7 per cent.