Wholesale prices continue to fall

Wholesale prices continue to fall

Wholesale prices continue to fall


For the fifth consecutive month, India’s wholesale prices declined in August, although the rate of drop was lessened from 1.36% to 0.52%, despite a decrease in food and primary component inflation to over 6% from over 7.5% in July.

Wholesale Price Deflationary Trend:

  • In August, India’s wholesale prices continued their deflationary trend, which has now lasted five months.
  • From 1.36% in July, the pace of drop in wholesale prices decreased to 0.52% in August.

Factors Affecting Deflation:

  • The price of fuel and electricity played a major role in the decline in the deflation rate.
  • Fuel and power price declines decreased from -12.8% in July to -6% in August.
  • Sequential Inflation:
  • Despite year-over-year deflation, the Wholesale Price Index (WPI) showed a sequential increase when comparing August to July.
  • WPI increased by 0.33% in August, compared to a 2.01% growth in July.

Price Trends in Specific Categories:

  • Price Trends in Specific Categories: Inflation in food and primary articles slowed, with primary food inflation falling from over 7.5% in July to around 6% in August.
  • Falling prices in specific categories were blamed for the negative inflation rate:
    • Oils derived from minerals
    • Basic metals
    • Chemicals and their byproducts
    • Textiles
    • Food and beverages

Details on Food Inflation: 

  • The wholesale food index grew by 5.6%.
  • Primary food inflation remained elevated in August, at 10.6%, after reaching a high of 14.3% in July.
  • Prices for vegetables increased by 48.4% in August, down from 62.1% in July.
  • Cereal inflation fell to a three-month low of 7.25% in August.
  • Paddy prices climbed by 9.2%, and pulse prices increased by 10.5%, the fastest rate in at least six months for both goods.
  • Prices for onions increased by 31.4% in August, compared to 7.1% in July.
  • Milk price inflation fell to a six-month low of 7.8%, but it was still only slightly slower than the 8.15% reported in July.

Future Prospects: 

  • Economists expect wholesale prices to recover from the deflationary trend in the next months.
  • This shows that inflation may go up as some deflationary causes moderate or reverse.


In summary, these points provide a complete picture of India’s wholesale price trends in August, including factors influencing deflation, particular price moves in several categories, and price change projections for the future.