[Asia Economy Reporter Kim Eun-byeol] Producer prices have risen for the third consecutive month, mainly driven by agricultural, forestry, and fishery products as well as petroleum products, due to the combined effects of cold waves, avian influenza (AI), and rising international oil prices.
According to the Bank of Korea on the 19th, the producer price index for January was recorded at 104.88 (2015=100), up 0.9% from December last year (103.90).
The index fell in October last year for the first time in five months, rebounded by 0.1% in November, and then rose for three consecutive months. Compared to January 2020, it is 0.8% higher, marking the second consecutive month of year-on-year increase.
Looking at the month-on-month rate of change by item, prices of agricultural, forestry, and fishery products jumped by 7.9%, the largest increase in two years and five months since August 2018 (8.0%). Livestock products rose 11.8%, and agricultural products increased 7.8%.
Among detailed items, the price increases were high for green onions (53%), pumpkins (63.7%), chicken (42.8%), eggs (34%), onions (29.5%), croaker fish (33.6%), and rockfish (47.8%).
Due to the strength of international oil prices, prices of manufactured goods also rose by 1.0%. The rise in coal and petroleum products was clear, with diesel up 9.7%, naphtha 14%, and gasoline 7.5%.
Producer prices in the service sector also increased by 0.5% compared to December. The largest increase was in finance and insurance (2.3%), followed by transportation (0.7%) and information and communication/broadcasting (0.7%).
Kim Young-hwan, head of the Price Statistics Team at the Bank of Korea’s Economic Statistics Bureau, explained, "Prices of agricultural, forestry, and fishery products rose due to reduced shipments of agricultural products caused by the cold wave, the spread of highly pathogenic AI, and culling." He added, "Producer prices have risen for three consecutive months compared to the previous month and for two consecutive months year-on-year. Since price pressures from oil, agricultural products, and raw materials continue, producer prices are expected to maintain an upward trend. The rise is expected to continue in February as well."
The domestic supply price index, which measures price changes including imports, also rose 1.6% month-on-month but remains 1.3% lower year-on-year. The total output price index for January, which includes domestic shipments plus exports, also increased by 1.2% compared to December.
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