Producer Prices Rise for 6 Consecutive Months... Onion Prices Surge 84%

The COVID-19 pandemic, the Russia-Ukraine war, China's lockdown measures, the U.S. interest rate hikes, and soaring international oil prices have all contributed to ongoing inflation. On the 20th, a citizen is purchasing onions individually at a large supermarket in downtown Seoul. The Ministry of Agriculture, Food and Rural Affairs has promoted the expansion of individual sales of onions, paprika, and other items to ease the burden on shoppers.
Photo by Moon Honam munonam@

[Asia Economy Reporter Seo So-jeong] Last month, as prices of manufactured goods and services rose, the producer price index, a leading indicator of consumer prices, continued its upward trend.

According to the Bank of Korea on the 22nd, the producer price index for June was 120.04 (2015=100), up 0.5% from May (119.43), marking six consecutive months of increase.

The producer price index measures the price changes of goods and services supplied by domestic producers to the market 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 for six consecutive months since January this year.

Looking at the price index changes by sector, agricultural, forestry, and fishery products rose 0.7% month-on-month due to increases in agricultural products (1.2%) and fishery products (3.0%).

Manufactured goods increased 0.7% month-on-month, led by coal and petroleum products (4.7%) and chemical products (1.6%).

Electricity, gas, water, and waste services rose 0.2% month-on-month, driven by electricity, gas, and steam (0.2%). Services increased 0.2% month-on-month, with restaurant and accommodation services (0.7%) and transportation services (0.6%) rising.

Among detailed items, prices rose month-on-month for onions (84%), gasoline (11.2%), diesel (9.8%), magazines and periodicals (5.2%), and international air passengers (4.1%). Chicken and pork prices increased 34.9% and 19.2%, respectively, compared to a year ago.

The domestic supply price index, which measures price changes of goods and services supplied domestically, also rose for six consecutive months. Raw materials (4.2%), intermediate goods (0.3%), and final goods (0.6%) all increased, resulting in a 0.8% rise month-on-month. Compared to the same month last year, it rose 16.0%, continuing an upward trend for 17 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 0.6% month-on-month, led by manufactured goods (0.9%).