Going forward, uncertainty regarding fluctuating trade scenarios and geopolitical conflicts is expected to keep global commodity prices volatile
Primarily driven by the moderation in food inflation and fuel sub-categories, the wholesale price index (WPI) is likely to have declined further to -0.45 per cent in July 2025 from last month’s -0.13 per cent, as per a report by Union Bank of India (UBI).
The report emphasised that food WPI corrected sharply to -1.72 per cent year-on-year (YoY) from -0.26 per cent in June, while core WPI strengthened from 1.06 per cent in June to 1.50 per cent in July. Fuel WPI too remained in the contraction zone, likely shrinking to -4.90 per cent from -4.23 per cent in June. Base effects have also played a role as sequentially, all sub-segments have seen an uptick, the report highlighted.
UBI noted that the month-on-month food WPI has likely gone up from 0.36 per cent in June to 1.02 per cent in July. The spike has been primarily led by some momentum gained in wholesale food prices across segments. M/m vegetables inflation in July is seen at 10.2 per cent, after an 11-month high of 18.29 per cent was recorded last month.
“YoY Fuel WPI likely continued the slide for the 12th month in line in July 2025 partly due to fall in inflation in crude and mineral oils segment and partly due to high base effect (3.01 per cent in July 2024) even as crude oil prices were up by around 9 per cent m/m in July,” the report pointed out.
Core WPI which reflects inflation excluding food and fuel, has gone up from 1.06 per cent last month to 1.50 per cent in July. While all sub-segments have seen near-flat momentum in recent months, metals are a key mover, and UBI sees an uptick in July tracking global prices.
“We estimate that m/m core WPI has also gone up from 0.05 per cent in June to 0.34 per cent this month. Core WPI includes price movements in non-food manufactured products, which closely track commodity prices as more than 40 per cent manufacturing raw materials are imported,” the report mentioned.
Going forward, uncertainty regarding fluctuating trade scenarios in view of additional US trade tariffs and geopolitical conflicts is expected to keep global commodity prices volatile, even though ample supply and weak demand may cap the upside, as per the report.
