Inflation based on the Wholesale Price Index (WPI) moderated to a two-year low of 3.85% in February from 4.73% in January, with manufactured products’ inflation cooling from 3% to a little under 2%, and primary articles, food and fuel and power recording milder downturns in the pace of inflation from a month earlier. The base effect also contributed as February 2022 saw a 13.4% pace.

The wholesale inflation rate for December was revised upwards to 5.02% from 4.95%. Fuel and power inflation eased slightly to 14.8%. Inflation measured by the Wholesale Food Index eased to 2.76% from 2.95% in January, the pace of decline slightly higher than witnessed in consumer food prices, which moved from 6% to 5.95% in the same period.

Onion prices continued to fall for the 18th straight month, shrinking 40.1%.

“Amidst a mixed trend in the wholesale prices of essential commodities in the early part of the month, the wholesale price inflation is anticipated to soften to about 2% in March,” ICRA said in a note. “Outlook for food inflation... is clouded by emerging risks such as a potential heatwave and the development of El Nino conditions,” it cautioned.