Wholesale prices decline 3% in May as coronavirus pulls down demand

Wholesale prices entered a deflationary zone in May, falling 3.2 per cent, as the month saw a decline in demand amid an economic hit in the wake of the coronavirus pandemic.

While overall wholesale price index (WPI) numbers were not available for April, in May last year the WPI-based inflation rate had stood at 2.79 per cent.

Among major categories, food items showed a slight inflation of 1.13 per cent in May. But vegetable prices in this category declined 12.48 per cent. Pulses continued to see elevated inflation, even as it declined to 11.91 per cent in May from 12.31 per cent the previous month.

Potato was one major item within food articles that saw major inflationary pressure points. However, here too, inflation declined to 52.2 per cent from 59.40 per cent.

Overall CPI numbers for May were not released, but food inflation crossed nine per cent.

Softening global crude prices led to fall in the prices of petroleum though the government -- both the Centre and some state governments-- raised taxes on them. For the third month in a row, fuel and power category saw prices deflating. These came down by 19.83 per cent in May against 10.12 per cent in the previous month and 2.93 per cent in March. Petrol, diesel, liquefied petroleum gas (LPG)-- all saw prices falling in May.

Manufactured products, which have overwhelming weight of 64 per cent in WPI, saw prices falling by 0.42 per cent in May. The April numbers were missing, but inflation in this category remained sub-one per cent since January this year. In fact, these items saw deflation of 0.25 per cent in December 2019.