Producer Prices Rise for 4 Consecutive Months... Pork Up 28% and Cooking Oil Up 12%

[Asia Economy Reporter Seo So-jeong] Due to the impact of rising raw material prices, the producer price index, a leading indicator of consumer prices, has once again hit an all-time high.

According to the Bank of Korea on the 20th, the provisional producer price index for April recorded 118.02 (2015 = 100), up 1.1% from the previous month (116.70). This marks the fourth consecutive month of increase. However, the rate of increase was smaller than in March (1.5%).

The producer price index measures the price changes of goods and services supplied to the market by domestic producers and is used as an economic trend indicator. The producer price index rose for 13 consecutive months until November last year, remained unchanged in December, and has been rising again since January this year.

Looking at the price index changes by sector, agricultural, forestry, and fishery products rose 2.0% month-on-month due to increases in livestock products (7.4%) and fishery products (2.6%). Manufactured goods rose 1.2% month-on-month, driven by coal and petroleum products (2.9%) and primary metal products (2.6%). The coal and petroleum products index (201.73) and chemical products index (122.65) themselves are at all-time highs.

Electricity, gas, water, and waste sectors rose 4.5% month-on-month, led by electricity, gas, and steam (5.7%). Services also increased 0.4% month-on-month, with transportation services (1.2%) and food and accommodation services (0.6%) rising.

Among detailed items, prices of pork (28.2%), anchovies (22.0%), edible refined oil (11.8%), diesel (7.2%), international air passengers (10.3%), and movie theaters (3.1%) notably increased.

The domestic supply price index, which measures price changes of goods and services supplied domestically, also rose for four consecutive months. Raw materials (10.7%) and intermediate goods (1.7%) increased, resulting in a 2.3% rise month-on-month. Compared to the same month last year, it rose 15.3%, continuing an upward trend for 15 consecutive months.

The total output price index, which measures price changes of goods and services based on total production including domestic shipments and exports, also rose 1.4% month-on-month, driven by manufactured goods (1.5%). Compared to the same month last year, it increased by 12.3%.