The latest weekly data on the wholesale price index (WPI) of primary articles and fuel released on Thursday shows a respite in food prices and a rise in fuel prices. “The rise in fuel prices will offset the easing of food inflation,” said Surabhi Mittal, economist with Icrier.
In the first week of March, the food price index rose 16.30% over last year, lower than the rise of 17.79% seen in February. But the annual inflation in the fuel and power group rose to 12.68%, against 10.19% in February, thanks to the increase in excise and customs duty on petrol and diesel.
“The supply of vegetables improved in March, bringing prices down,” said an official of the Agricultural Produce Market Committee (APMC) in Navi Mumbai. “Food inflation has possibly seen the worst,” said Siddhartha Sanyal, economist, Edelweiss.
But it may be replaced by inflation driven by fuel prices. “Today’s figures reflect a direct impact of the hike in fuel prices. The indirect impact through other commodities may be seen over time.”
Food and fuel prices are monitored weekly. The government releases the overall WPI inflation rate on a monthly basis, which also covers the manufactured products index. The headline WPI inflation for February stood at 9.89%. March is expected to see inflation hit double digits.
Even vegetables prices are expected to rise. If wholesalers at the APMC are to be believed, except for tur dal, whose prices depend on the yield in UP, prices of other food commodities that have fallen by 20% to 30%, will rise.
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