India’s food prices continue their run unrestricted even as the wholesale price inflation remains in the negative zone. Headline inflation, as indicated by the wholesale price index (WPI), stood at -0.95% during the week ended August 15 compared with -1.53% in the previous week. The rate had turned negative for the week ended June 6 for the first time since the new WPI series started in 1995.
Despite the negative number, there is no respite from the surge in food prices as the food index surged 13.3% from a year ago level. Poor monsoon has pushed up the supply-demand issues in the food sector resulting in rising prices of many commodities including sugar and pulses.
Further, the negative inflation is only on annual basis while on continuous or weekly basis the prices have been actually rising. The wholesale price index for all commodities used to measure the inflation, was up 0.5% on a week-on-week basis, at 238.8 for the said week. The rise was primarily on account of 320 basis points jump in the food articles over the week.
The WPI based inflation remains negative primarily due to high base effect from last year and lesser weight of the food articles. A better idea of inflation, as far as cost of living is concerned, may be obtained from consumer prices which have surged over 12% in the month of July, reflecting sharp increase in primary articles.