Fuel and vegetable prices behind wholesale inflation in April: Cabbage, raw cotton, radish, and the humble karela (bitter gourd) saw the highest wholesale inflation in April and together with kerosene, liquid ammonia, aviation fuel, and natural gas, drove the price rise to a record 15.08% in April.

While the wholesale inflation in kerosene was 118.2% year-on-year in April, that for cabbage and bitter gourd was in the high double digits at 88.3% and 75.4%, respectively.

The high inflation in the food and fuel basket may put pressure on household budgets and drive down the consumption of discretionary goods such as mobile phones, leisure, and travel.

The wholesale price index (WPI) measures price rises in 697 items, of which 564 are manufactured products. The high wholesale inflation has impacted retail prices, driving consumer inflation to an eight-year high of 7.79%.

An earlier and hotter summer has pushed up prices of perishables like fruits and vegetables. Inflation in food articles rose to 8.9% in April from 8.7% in March. “This will possibly lead to shrinkflation, with companies going in for grammage cuts,” Nayar said.

Cotton prices have hovered at ₹1 lakh per candy on high global prices, though at the start of the season, prices in India were almost half of that. Naphtha, diesel, crude, and furnace oil too witnessed inflation above 60% last month.

Inflation in fuel and power, which have a 13.2% weight in WPI, rose to 38.7% in April from 34.5% in March and the pressure was most visible in items like kerosene, aviation turbine fuel (ATF), and furnace oil, though inflation in coal and electricity eased.


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