Producer Prices Fall 0.4% in November... Decline Continues for 2 Consecutive Months

Impact of Falling Petroleum and Agricultural Product Prices
BOK: "Increase in Industrial Electricity Rates Limits Decline"

Last month, producer prices fell for the second consecutive month as prices of petroleum and chemical products, as well as agricultural products, declined.

According to the Bank of Korea on the 21st, the producer price index for November dropped by 0.4% compared to the previous month.

The producer price inflation rate rebounded to 0.3% in July after four months, then rose to 0.9% in August and 0.5% in September, before turning negative at -0.1% in October.

Yoo Sung-wook, head of the price statistics team at the Bank of Korea, explained, "Producer prices in November fell by 0.4% from the previous month as industrial electricity prices rose, but petroleum products, chemical products, and agricultural products declined."

Specifically, agricultural, forestry, and fishery products fell by 2.7% from the previous month as fishery products rose by 3.8%, but agricultural products (-4.9%) and livestock products (-2.3%) decreased.

By item, agricultural products such as napa cabbage (-41.8%) and rice (-5.1%) declined, and livestock products such as pork (-3.8%) and chicken (-4.0%) also fell. Yoo said, "Agricultural product prices fell due to increased shipments of napa cabbage and rice, and livestock product prices declined as shipments of pork and chicken increased due to a rise in slaughter numbers."

Manufactured goods rose by 0.1% in food and beverages due to price increases in alcoholic beverages, but coal and petroleum products (-5.5%) and chemical products (-0.9%) fell due to a decline in international oil prices, resulting in a 0.7% decrease from the previous month.

Electricity, gas, water, and waste services rose by 0.7% from the previous month as industrial electricity increased by 4.6%. Yoo predicted, "Electricity rate hikes will continue to be a factor in price increases in December."

In services, restaurant and accommodation services rose by 0.1%, but real estate services fell by -0.1%, showing a level similar to the previous month.

The producer price index last month rose by 0.6% compared to the same month last year, marking four consecutive months of increase.

Domestic supply prices last month fell by 1.1% from the previous month. Raw materials (-4.0%), intermediate goods (-0.8%), and final goods (-0.8%) all declined.

The total output price index for November, which includes domestic shipments plus exports, fell by 1.2% compared to October. Agricultural, forestry, and fishery products dropped by 2.6%, and manufactured goods also fell by 1.9%.