The average rates of some food items, especially vegetables got lower as the wholesale inflation rate has finally started to cool off and has reduced to touch 4.53 per cent in August, as stated by the commerce and industry ministry.
Wholesale commodity prices were on the rise since April this year and the WPI market faced continuous inflation, resulting into costlier food items. Months after facing inflation, the wholesale market is starting to get back on track as the government stats indicate a depletion at 4.53 per cent in wholesale inflation in the month of August. While back in July, the inflation touched highest in four years with 5.09 per cent, but it softened and mulled down to 4.53 per cent within a month to make it to the lowest since April.
The cool off in wholesale market has led to retail inflation ease, which fell down to 3.69% in lowest, marking lowest in ten months and even lower than the Reserve Bank of India’s (RBI) medium term target of 4%. Which means food items, especially vegetables which had plummeted up to a rise of 20.9% back in July should get cheaper – but the wholesale ease is unlikely to directly make food items cheaper as the inflation ‘fuel & power’ was at 17.73 per cent in August.
The soaring fuel prices means higher transportation and shipping charges – and that translated to deflation in vegetables by 20.18 per cent, as against 14.07 per cent in July. However, the depletion trend can make perishable food items cheaper if the value of rupee rises and the continuing slack in food prices would weigh against the surge in crude oil and retail fuels in the current month. Perhaps, the government is working on aiding the ailing rupee in international market, which will boost overall economic stats of the country.