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The Hard Grind: Wheat inflation becoming hard to stomach for Indian households -Siddharth Upasani

-Moneycontrol.com

India was supposed to be largely insulated from the war between Russia and Ukraine as far as prices of food items were concerned. However, there are signs that the conflict in Europe is adding to Indians' wheat bill.

On April 18, data from the commerce ministry showed India's Wholesale Price Index (WPI) inflation unexpectedly rose to a four-month high of 14.55 percent in March. And while energy and metals led the charge—the ministry commented, which it often does not, that the rise in WPI inflation was mainly because of higher prices for crude oil, natural gas, mineral oils and basic metals due to supply chain disruptions caused by Russia-Ukraine conflict—a certain other item was also responsible for pushing inflation higher.

While the food index of the WPI rose 0.54 percent month-on-month in March, indicating the presence of some sequential price momentum, the index of wheat rose 3.2 percent.

Of course, wheat was not the only food article to experience a sequential increase in prices. In fact, there were 20 other food articles whose prices rose by an even greater percentage when compared to February levels. But put 16 of these 20 items together and their combined weight in the WPI basket still does not match up to that of wheat.

Wholesale wheat inflation jumped to 14.0 percent in March, the highest in 63 months. The last time wholesale wheat inflation was higher was in December 2016, in the immediate aftermath of demonetisation.

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