India’s Inflation based on the Wholesale Price Index (WPI) increased to 13.11% year-on-year in February 2022 compared with 4.83% in February 2021, according to data released by the commerce ministry on March 14.
WPI inflation in January 2022 was 12.96%, while in December the inflation was higher than observed in February at 14.27%. It is to be noted that the inflation statistics of January and February are provisional.
On a monthly basis, there is an incremental change in the WPI index in the month of February. It stood at +1.4 % as compared to January 2022. The Fuel and Power index saw a massive rise of 4.35% from January 2022.
While the Reserve Bank of India (RBI) considers Consumer Price Index-based inflation in framing the policies, high WPI inflation is considered as a forerunner to increased consumer prices as producers pass on rising costs to their customers, ultimately hampering the purchasing power of the customers.
Notably, it is consecutively for the 11th time the WPI has been registered in double digits.
The higher inflation rate in February 2022 was primarily triggered by the increase in prices of “mineral oils, basic metals, chemicals and chemical products, crude petroleum & natural gas, food articles and non-food articles etc.” as compared to a year ago. The Russia-Ukraine war also worsened the scenario, as India is a market for Russia to export mineral fuels, oils and products of their distillation, mineral waxes.
In addition, it can not be ignored that the war-stricken nation Ukraine satisfies India’s 70% need for Sunflower oil. Till February, India had imported $1.98 billion worth of goods, of which $1.37 billion were that of vegetable or animal fats.
Inflation for manufactured products increased 9.84 % year on year ( YoY) in February from 9.42% in January and slipped 0.87% from 10.71% in December.
Inflation for primary articles dipped to 13.39% in February from 13.87% in January, while for the fuel and power group, the inflation rate dropped to 31.50% in February from 32.27% in January. In December, the inflation for fuel and power index stood at 38.08%.
How Inflation Impacted The Food Index?
A Look At Year-Over-Year Data:
WPI based inflation for food articles increased to 8.19% in February 2022 from 1.81% in February 2021.
- Inflation for cereals jumped to 6.07% in February 2022 compared with a negative of 6.58% in February 2021.
- An ease down could be observed in Pulses, with the inflation rate relaxing to 2.72% in the last month compared with 10.25% in February last year.
The government data shows a massive rise in the prices of vegetables, potatoes, and wheat last month.
- The wheat Inflation rate stood at 11.03% in February 2022 compared to -10.58% in February 2021, while potatoes jumped to 14.78% in February 2022 from a negative of 30.16% in February last year.
- The prices of eggs in February increased to 8.14%, while in the year-ago period, it stood at 0.65%.
- Vegetables are costing a life to a common man, with its inflation rate hiking to 26.93% in the last month, while in February last year, it stood at -2.95%.
- Thankfully, tears did not pour from the common man’s eyes last month while purchasing onions, as it reported a deflation rate for February was 26.37% from the higher inflationary pressure at 31.28%.
- The increase in price for LPG in February 2022 stood at 26.27%, up from 1.42% a year ago. Similarly, Petrol prices were flaming high at 58.33%, while in the same period last year, it was 4.96%.
Oil Seeds: The Inflation rate for oilseeds in February 2022 stood at 22.88%, up from 14.05% a year ago.
The last 6 months’ trend shows a marginal decrease in prices each month, with the oilseeds prices in January 2022 dipping to 23.27%.
Crude Petroleum: Russian invasion of Ukraine and boycotts faced by Ukraine Impacted the crude oil massively. In the last month, the inflationary pressure on crude oil increased nearly three-times to 55.17% from 19.54% observed a year ago.
For the last six months, the crude oil has been soaring high, with October 2021, undoubtedly marking the highest inflation rate at 106.77%. Since then, a downfall in the inflation rate of of crude petroleum could be seen until January. The downgrade momentum has taken a backseat from February and changed its path to accelerating upwards. In Feb, the inflation rate was 55.17% for crude petroleum.
Fluctuation In Prices Of Food Items In The Last 6 Months:
