Home Office figures show that the total increased to 2,259 in 2014-15, compared to 1,877 in the previous year.
Almost 75% of these were classed as race hate crimes - 1,677, a 19% increase on the previous year.
But campaigners say much of the rise is due to better reporting, and communities feeling more positive about coming forward to report incidents.
Chair of the Hate Crime Criminal Justice Board Cymru, Mark Warrender said: "We welcome the increase in recorded hate crimes across the Welsh forces as a positive indicator that communities are feeling confident to report hate crime to us.
"Although initially it may seem alarming that levels have risen, this doesn't necessarily mean that more hate crime is happening.
"We still, however, have work to do.
"Although some of the percentage increases in recorded hate crimes are significant, the actual numbers are still low, particularly for disability, transphobic and religious hate crimes."
In Wales as a whole, the next highest hate crime was for sexual orientation, at 351, followed by disability at 202, religion at 84 and transgender at 38.
The rises in hate crime and race hate crime in Wales were broadly similar to those for Wales and England taken together.
Marking National Hate Crime Awareness Week, the Gwent Police and Crime Commissioner Ian Johnston said the force was encouraging people to report such offences.
"I personally believe the increase in reported hate crime is a result of improved accuracy in recording practices and victims having the confidence to report these crimes to the police and partner agencies," said Mr Johnston.
"My overall priority is that people have the confidence to report these crimes and they can be assured that they are dealt with in the appropriate manner."
The Assistant Chief Constable of the Dyfed-Powys force, Liane James, said it was vital people came forward when they witnessed hate crimes.
"Hate crimes and incidents hurt; they can be confusing, frightening and can leave victims feeling vulnerable and insecure," she said.
BBC Wales has also asked both South Wales and North Wales Police to respond.
The number of recorded hate crimes in Wales has risen by more than 20% in the past year.