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.