Cabbage, raw cotton, radish, and the humble karela (bitter gourd) suffered the most wholesale inflation in April, bringing the total price increase to a record 15.08 percent.
While kerosene inflation was 118.2% year over year in April, cabbage and bitter gourd inflation was in the upper double digits at 88.3% and 75.4 percent, respectively.
High food and fuel inflation may put downward pressure on household finances, reducing consumption of discretionary items such as cellphones, leisure, and travel.
The wholesale price index (WPI) tracks price changes in 697 different commodities, 564 of which are manufactured goods. Consumer inflation has reached an eight-year high of 7.79 percent as a result of rising wholesale inflation.
“Most of these commodities, such as vegetables and oil, have a direct influence on household budgets, and rising inflation will limit their disposable income and demand,” according to the ICRA.
Prices of perishables such as fruits and vegetables have risen due to an earlier and hotter summer. Inflation in food items increased to 8.9% in April, up from 8.7% in March. “This could lead to shrinkflation, with corporations cutting their grammage,” Nayar predicted.
Cotton prices have been hovering over 1 lakh per candy due to high worldwide costs, despite the fact that prices in India were about half that at the start of the season. Last month, naphtha, diesel, crude, and furnace oil all experienced inflation of more than 60%.