Indian inflation based on the wholesale price index (WPI) rose to a four-month high of 14.55 percent in March from 13.11 percent in February, according to data issued by the Ministry of Commerce on April 18.
WPI inflation 7.89 percent in March 2021. Another 10 percent-plus print means that WPI inflation is now in a two-digit area for 12 consecutive months.
The increase in wholesale inflation in March came after the data released on April 12 showed a closer retail inflation rate of the Consumer Price Index (CPI) jumped to 17 months high of 6.95 percent last month.
While the Reserve Bank of India (RBI) policy target is spelled in terms of CPI inflation, WPI high inflation is seen as a precursor to higher consumer prices because producers continue to increase costs to customers.
The increase in WPI inflation in March was driven by price increases throughout the board, although non-food items cost fees.
“The high inflation rate in March, 2022 mainly due to the increase in prices of crude oil & natural gas, mineral oil, basic metals, etc. because of a global supply chain caused by Russian-Ukrainian conflict,” the Ministry of Trade said.
The index for fuel groups and WPI energy jumped 5.68 percent month to month in March, while for manufacturing products rose 2.31 percent in the same period.
Manufacturing products contribute 64.23 percent of WPI baskets.
The food index, compared, rose only 0.54 percent in March from February. However, the month increase in March was higher than 0.06 percent posted in February.
Overall, the index of all WPI commodities rose 2.69 percent month to month against 0.76 in February, indicating increasing momentum in price pressure.
The impact of the war between Russia and Ukraine seems to spill into non-fuel prices, with the index for wheat up 3.19 percent in February. As a result, wheat inflation increased to 14.04 percent from 11.03 percent in February.
Russia and Ukraine are the main global wheat exporters.
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