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February Sees a Slight Uptick in Wholesale Price Inflation to 2.38%, Driven by Soaring Food and Beverage Costs

Wholesale Price Inflation Rises Slightly in February

In February, wholesale price inflation saw a modest increase to 2.38%, primarily driven by higher prices for manufactured food products such as vegetable oil and beverages. This uptick follows three consecutive months of decline, with the Wholesale Price Index (WPI) inflation standing at 2.31% in January and a mere 0.2% in February 2024.

Wholesale Price Inflation rises to 2.38% in February driven by food and beverage costs

Key Drivers Behind the Inflation Increase

The rise in inflation for February 2025 was mainly attributed to increased prices in manufactured food products, food articles, non-food articles, textiles, and other manufacturing. Notably, inflation in manufactured food products surged to 11.06%, with vegetable oil prices climbing 33.59%. Beverages also saw a slight increase of 1.66%.

Contrasting Trends in Food Prices

Despite the cooling of vegetable prices, with potato prices dropping significantly by 27.54%, fruits and onions remained expensive, showing inflation rates of 20% and 48.05%, respectively. Milk price inflation also eased to 1.58%, down from 5.40% in January.

Fuel and Power Category Shows Deflation

The fuel and power category showed a deflation of 0.71% in February, a slight improvement from a larger deflation of 2.78% the previous month.

Outlook on Future Inflation Trends

ICRA Senior Economist Rahul Agrawal noted that while food inflation is expected to ease further due to strong crop output and a high base effect, higher-than-normal temperatures could pose a risk to future food price trends. He also indicated that the WPI inflation for the financial year 2025-26 is expected to average between 2.5% and 3%.