WPI Food Index
Topic: Inflation and Index Numbers: CPI, WPI, IIP and the Deflator · NCERT: Class 11, Ch 7 "Index Numbers"
Meaning
The WPI Food Index tracks wholesale prices of food. It combines two parts of the Wholesale Price Index (WPI):
- food articles, from the primary articles group (raw items such as cereals, vegetables and milk);
- food products, from the manufactured products group (processed items).
Its weight is 24.23 in the 2011-12 series, about a quarter of the WPI. It shows food price pressure at the wholesale stage, which may later pass through to retail prices. The WPI is compiled by the OEA, DPIIT.
Example
In the 2011-12 WPI series, food carries 24.23 of 100. In the CPI-Combined (2012 series), food and beverages carry 45.86. So a monsoon-driven spike in vegetable prices moves retail inflation much more than wholesale inflation.
Don't confuse with
- Consumer Food Price Index (CFPI): a retail food index compiled by the NSO, with a weight of about 39 in the 2012 CPI-C. It excludes non-alcoholic beverages and prepared meals, snacks and sweets.