Food deflation deepens; onions, potatoes, vegetables see sharp price fall

Wholesale price inflation dropped to a 27month low of 121 per cent in October driven by a sharp deflation in food items such as pulses and vegetables as well as lower prices of fuel and manufactured goods government data showed on FridayWPIbased inflation stood at 013 per cent in September and 275 per cent in October last yearldquoThe negative rate of inflation in October 2025 is primarily due to a decrease in prices of food articles crude petroleum and natural gas electricity mineral oils and basic metal manufacturingrdquo the industry ministry said in a statementAccording to the WPI data deflation in food articles rose to 831 per cent in October compared to 522 per cent in September with onions potatoes vegetables and pulses seeing significant price declinesIn vegetables deflation hit 3497 per cent in October up from 2441 per cent in September Pulses saw deflation of 1650 per cent while potatoes and onions recorded declines of 3988 per cent and 6543 per cent respectivelyIn manufactured products inflation eased to 154 per cent from 233 per cent in September Fuel and power saw deflation of 255 per cent compared to 258 per cent in September marking a decline for the seventh consecutive monthldquoLooking ahead a favourable base effect for the rest of FY26 is expected to keep the wholesale index in deflation Consequently IndRa anticipates wholesale deflation in November 2025 to remain under 1 per centrdquo said Paras Jasrai Associate Director at India Ratings and ResearchThe fall in WPI inflation is in line with expectations after GST rates were reduced on September 22 GST on massconsumption items was lowered as part of tax rationalisation reducing the earlier fourtier structure to just two slabs 5 per cent and 18 per centThese tax cuts combined with a favourable base effect have helped pull down both wholesale and retail inflationData released last week showed retail inflation falling to an alltime low of 025 per cent in October driven by GST reductions and last yearrsquos high base In September consumer price inflation stood at 144 per centThe Reserve Bank of India RBI which tracks retail inflation kept benchmark policy rates unchanged at 55 per cent last monthThe decline in both retail and WPI inflation is expected to increase pressure on the RBI to consider an interest rate cut in the next monetary policy meeting scheduled from December 3 to 5However Jasrai noted that based on current economic growth trends the case for monetary easing is not very strong FY26 retail inflation is now projected to fall to around 25 per centldquoStill to prevent the economy from slipping into sluggish and weak growth the RBI may opt for a 25ndash50 basis point cut in the repo rate during its December 2025 policy reviewrdquo he addedPHDCCI CEO and Secretary General Ranjeet Mehta said the chamber expects WPI inflation to remain rangebound due to benign crude oil prices adequate foodgrain buffer stocks and a healthy kharif harvestThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever