Why WPI is high
Inflation in wholesale prices accelerated to a 16-month high of 3.4% in June, from May’s 2.6%, led by a spike in food inflation to a 22-month high of 8.7% and a near-doubling in manufactured products’ price gains to 1.43%.
Inflation in wholesale vegetable prices surged to a 10-month high of 38.8%, from May’s 32.4% pace, with onion and potato prices rising year-on-year by 93.4% and 66.4%, respectively
Inflation in pulses (21.6%), paddy (12.1%), fruits (10.1%) and cereals (9.3%) were other contributors to the wholesale inflation print that lifted primary food articles inflation to 10.9%.
The rise in the Wholesale Price Index suggests that retail prices may face further upward pressures.
For producers beyond food items, a five-month peak of 9.6% inflation in minerals, and a 12.6% uptick in crude petroleum and natural gas prices, the highest in nine months, were also a major cause for concern over upward pressure on input costs.
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