With India battling high inflation, which includes price rise as one of the dominant factors, the prices of food consumables could potentially skyrocket further amidst the Lok Sabha polls. India's wholesale prices rose to a 13-month high of 1.26 per cent in April from 0.53 per cent in March 2024.

Due to an uptick in food inflation fuelled by rising prices of food articles, especially vegetables, wholesale food inflation will continue to be a cause of concern in May and June, as heatwaves are likely to push up prices of perishable commodities. The India Meteorological Department has predicted heatwave conditions during May and June, a period when prices of vegetables and food items typically increase.

Unemployment and inflation are the primary issues dominating among the voters during the discourse in India's general election 2024. The data released by the Ministry of Commerce highlighted that in the food articles basket, vegetable inflation is 23.60 per cent in April, up from 19.52 per cent in the previous month.

Wholesale food inflation also increased to 5.52 per cent on an annual basis, while food inflation grew 1.94 per cent on a month over month (MoM) basis.  The data shows a notable increase in onion prices which rose by 59.75 per cent in April, following a 56.99 per cent increase in March. The increase was attributed to a major shortage in onion supply until the next kharif crop, which is expected to be a reversal from the current scenario. Inflation in potato jumped to 71.97 per cent in April from 52.96 per cent in March. In onion, it was 59.75 per cent in April, versus 56.99 per cent in the previous month.

The Wholesale Price Index measures the change in prices of goods traded by wholesale businesses. Unlike the Consumer Price Index (CPI), which tracks prices of goods and services purchased by consumers, WPI tracks factory gate prices.

The Ministry of Commerce and Industry releases WPI data on the 14th of every month, or on the next working day. Under the index, commodities are categorised into three groups — primary articles (which are further divided into food and non-food articles), fuel  and power and manufactured products.

April marks the sixth successive month that the Wholesale Price Index (WPI) has risen on a year-on-year basis, after seven months of deflation. On a month-on-month basis, the WPI was up 0.8 per cent with primary articles and food prices rising nearly 2 per cent in April, while manufactured products were up 0.5 per cent. As per the data, inflation in food articles rose to 7.74 per cent in April as against 6.88 per cent in March. In the fuel and power basket, inflation stood at 1.38 per cent in April, up from (-)0.77 per cent in the previous month.

"Positive rate of inflation in April 2024 is primarily due to increase in prices of food articles, electricity, crude petroleum and natural gas, manufacture of food products, other manufacturing etc," Ministry of Commerce & Industry said in a statement on Tuesday.

As per the data, manufactured products witnessed deflation of 0.42 per cent in April, as against deflation of 0.85 per cent in March.

ICRA Chief Economist Aditi Nayar said WPI inflation is heavily sensitive to global commodity prices which is undergoing an upturn year after year. According to ICRA, the wholesale food inflation, which is at a four-month high, will continue to be a cause for concern in May and June as heatwave is likely to jack up prices of perishable commodities.

Although the impact of the high base of last year will play out in July and August, the impact of monsoon will determine the price conditions in the subsequent months. As per data released on Tuesday, the wholesale price index (WPI)-based food inflation was at a four-month high of 7.74 per cent in April.

Retail food inflation also remained stubbornly high at 8.70 per cent in April 2024, as against 3.84 per cent in April 2023. Retail inflation data released on Monday showed that the consumer price index (CPI)-based inflation was at an 11-month low of 4.83 per cent in April, even though the prices of food and vegetables ruled high.