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Wholesale Price Index: August 2019

Wholesale Prices In India Rose By 1.08 Percent Year-On-Year In August 2019, The Same Pace As In The Previous Month And Compared With Market Expectations Of A 1.04 Percent Gain.

It Remained The Lowest Wholesale Inflation Rate Since June 2017, As Cost Of Fuel Continued To Fall While Food Prices Increased Further.

On A Monthly Basis, Wholesale Prices Rose By 0.2 Percent In August. Producer Prices Change In India Averaged 7 Percent From 1969 Until 2019, Reaching An All Time High Of 34.68 Percent In September Of 1974 And A Record Low Of -11.31 Percent In May Of 1976

Wholesale Price Index, Or WPI, Measures The Changes In The Prices Of Goods Sold And Traded In Bulk By Wholesale Businesses To Other Businesses. WPI Is Unlike The Consumer Price Index (CPI), Which Tracks The Prices Of Goods And Services Purchased By Consumers.


The Inflation During The Month Has Been Dragged Down By :

  • Manufactured goods – There has been no increase in the price levels of the manufactured goods in August 2019 compared with the 4.4% growth in the corresponding period a year ago. This is indicative of lack of pricing power of the manufacturers. The price levels of manufactured products have been declining since Nov’18.
  • Deflation in the fuel and power group: The inflation in the fuel and power segment has been in negative territory since the last three months. The price levels witnessed a deflation of (-) 4% in Aug’19, higher than the (-)3.6% in the previous month. Decline in crude oil prices amid on-going uncertainties of global economic slowdown and high base effect has been weighing on the fuel inflation.

The Inflation In Primary Articles Continue To Increase Driven By Both Food (Viz Cereals, Pulses, Vegetables, Onion And Fruits) And Non-Food Articles. 

The Index For ‘Food Articles’ Group Rose By 1.4% To 155.9 (Provisional) From 153.7 (Provisional) For The Previous Month Due To Higher Price Of Betel Leaves, Condiments & Spices And Jowar (4% Each), Ragi, Barley, Fruits & Vegetables And Pork (3% Each), Fish-Inland, Wheat, Arhar, Maize And Beef And Buffalo Meat (2% Each) And Fish-Marine, Milk, Peas/Chawali, Rajma, Paddy And Mutton (1% Each). However, The Price Of Egg (7%), Tea (2%) And Poultry Chicken And Gram (1% Each) Declined.

The Index For ‘ Non-Food Articles’ Group Rose By 0.9% To 129.9 (Provisional) From 128.8 (Provisional) For The Previous Month Due To Higher Price Of Floriculture (14%), Linseed (4%), Sunflower And Safflower (Kardi Seed) (3% Each), Gingelly Seed (Sesamum), Copra (Coconut) And Groundnut Seed (2% Each) And Mesta, Rape & Mustard Seed And Soyabean (1% Each). However, The Price Of Hides (Raw) And Raw Rubber (4% Each), Niger Seed (3%), Raw Cotton (2%) And Fodder (1%) Declined.

The Index For ‘Crude Petroleum & Natural Gas’ Group Rose By 1.4 Percent To 88.1 (Provisional) From 86.9 (Provisional) For The Previous Month Due To Higher Price Of Natural Gas (3%) And Crude Petroleum (1%).


The Index For This Major Group Rose By 0.1% To 100.7 (Provisional) From 100.6 (Provisional) For The Previous Month. The Groups And Items Which Showed Variations During The Month Are As Follows:-

The Index For ‘Mineral Oils’ Group Rose By 0.1% To 91.5 (Provisional) From 91.4 (Provisional) For The Previous Month Due To Higher Price Of Bitumen (9%), Furnace Oil (4%) And ATF And Kerosene (3% Each). However, The Price Of LPG (11%) And Petroleum Coke (2%) Declined.

Manufactured Products

Manufactured Products Which Dominate The Wholesale Inflation, (64% Weight In The WPI Basket) Witnessed No Rise In Price Levels During August-19.

The Inflation In Manufactured Products During Apr-Aug’19 Has Witnessed A Contraction Of (-) 0.42% Viz-Z-Viz A Growth Of 1.73% During The Corresponding Period A Year Ago.

9 Out Of The 17 Industries Posted Negative Growth Rates In July 2019 Namely Basic Metals (6%), Semi-Finished Steel (5.8%), Sugar (4.2%), Rubber And Plastic Products (1.2%) Etc.


Upside Risks To Wholesale Food Inflation Is Likely To Emanate From The Seasonal Factors. However, Weak Prices Of Manufactured Products Will Help Restrict Any Upward Movement In The Wholesale Inflation

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