Producer Prices in November Down 0.2%... First Decline in 3 Months

Price Decline of Agricultural Products, Livestock Products, and Petroleum Products

Seoul city supermarket scene [Image source=Yonhap News]

Prices of agricultural and livestock products, petroleum products, and others fell, causing the producer price index to turn down for the first time in three months last month.

According to the Bank of Korea on the 22nd, the producer price index in November decreased by 0.2% compared to the previous month. This marked a decline for the first time in three months since a 0.4% drop in August.

Compared to a year ago, it rose by 6.3%, but the upward trend has been slowing for five consecutive months, with increases of 10.0% in June, 9.2% in July, 8.2% in August, and 7.9% in September.

The slowdown in the producer price index was largely influenced by price declines in agricultural, forestry, and fishery products as well as industrial goods.

In the case of agricultural, forestry, and fishery products, seafood prices rose by 4.1%, but agricultural products (-7.8%) and livestock products (-0.6%) fell, resulting in a 3.2% decrease compared to the previous month.

Seo Jeong-seok, head of the price statistics team at the Bank of Korea, explained, "Due to favorable weather conditions, autumn cabbage production increased, and the autumn radish crop also improved. Livestock product prices fell overall as the breeding and import volumes of pork and beef increased."

Industrial goods also fell by 0.2% compared to the previous month, despite increases in food and beverage products (0.2%), as chemical products (-0.9%) and coal and petroleum products (-1.0%) declined.

The electricity, gas, water, and waste sector fell by 0.1% compared to the previous month due to decreases in electricity, gas, and steam (-0.1%). However, industrial city gas rates are scheduled to increase in December, which is expected to increase upward pressure.

The service sector showed a flat trend, with increases in financial and insurance services (1.3%) but decreases in transportation services (-0.3%).

The domestic supply price index in November fell by 1.5% compared to the previous month. This was due to declines in raw materials (-4.7%), intermediate goods (-1.1%), and final goods (-1.2%). This index measures price changes of goods and services supplied domestically to understand the transmission process of price fluctuations.