Typhoon and Monsoon Effects Disappear, October Producer Prices Fall... Agricultural Products Down 15%

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] As soaring agricultural product prices fell, the producer price index turned downward in October.

According to the Bank of Korea on the 20th, last month's producer price index was 102.92 (2015=100), down 0.5% from September (103.42). This marks the first decline in six months since April (-0.9%).

The producer price index is an indicator that shows price changes of goods and services supplied by domestic producers to the market and is used as a leading indicator of consumer prices.

Prices of agricultural, forestry, and fishery products fell 9.6% compared to the previous month. This is the first decline in four months since June. The impact of the monsoon and typhoons ended, increasing shipments, and the disappearance of demand from the Chuseok holiday caused agricultural product prices to drop. Agricultural product prices plummeted 15% month-on-month, centered on napa cabbage (-58.0%), apples (-34.6%), and watermelons (-61.8%). Livestock products such as pork (-11.4%) and chicken (-9.7%) also fell 5.4%, and fishery products decreased by 1.1%.

A Bank of Korea official said, "Prices of agricultural, forestry, and fishery products all fell as they escaped the effects of the prolonged monsoon and typhoons," adding, "Although prices of some agricultural products may rise due to increased demand for kimchi-making in November, the overall impact will not be significant."

As international oil prices fell, prices of manufactured goods also dropped 0.1%. Coal and petroleum products fell 3.2%, and computer, electronic, and optical equipment such as DRAM (-8.5%) decreased by 0.3%.

Service prices showed a flat trend month-on-month, with real estate services rising 0.2% but financial and insurance services falling 0.4%.

The domestic supply price index, calculated by combining the producer price index and import price index, fell 1.0% month-on-month. Compared to the same month last year, it dropped 3.4%. The total output price index, which measures price changes of goods and services based on total output including exports beyond domestic shipments, fell 0.9% month-on-month.