What is Wholesale Price Index and why is it so important?

It is a representative sample of wholesale goods that is used as a measure of inflation, and varies from country to country. Basically it helps economists understand inflationary pressures at the pre-retail level.

It can certainly affect monetary policy, and it might affect purchasing manager decisions. Further, it is a good leading indicator of price inflation on the consumer level - if the store pays more for inventory then so does the end consumer.