Rising Oil and Agricultural Prices... Producer Prices Increase for Two Consecutive Months

0.5% Increase Compared to Previous Month

International oil prices rebounded and agricultural products, centered on fruits, rose, causing the producer price index to increase for two consecutive months last month.

According to the Bank of Korea on the 21st, the producer price inflation rate fell in October (-0.1%) and November (-0.4%) last year but rebounded in December (0.1%) and continued its upward trend last month, rising 0.5% compared to the previous month.

Specifically, agricultural, forestry, and fishery products rose 3.8% month-on-month, with agricultural products (8.3%) and fishery products (0.2%) increasing despite livestock products (-1.3%) declining.

By item, agricultural products such as apples (7.5%) and tangerines (48.8%) rose, while livestock products such as pork (-4.0%) and chicken (-2.8%) fell. Yoo Seong-wook, head of the Bank of Korea's price statistics team, said, "Due to last year's poor harvest, the stock of stored apples decreased, and the seasonal fruit tangerines saw increased substitute demand, leading to a rise in agricultural products centered on fruits."

Manufactured goods fell 0.1% month-on-month as primary metal products (-1.0%) declined due to sluggish demand in upstream industries, but coal and petroleum products (0.5%) rose mainly due to the increase in international oil prices, and chemical products (0.4%) also increased due to reduced supply, resulting in an overall increase.

Electricity, gas, water, and waste rose 1.0% month-on-month as industrial city gas prices increased by 10% due to the rise in LNG import prices, and water and sewage charges (2.7%) also increased.

In services, information and communication and broadcasting services (1.6%), business support services (1.1%), and real estate services (0.2%) rose, leading to a 0.6% increase compared to the previous month. Team leader Yoo said, "This partly reflects the rise in minimum wage and electricity prices."

By special classification, food prices rose 1.9% month-on-month due to the price increase in agricultural, forestry, and fishery products, and fresh food rose 10% month-on-month. Energy, which includes petroleum products, rose 0.7%, and IT rose 1.3%. Other than food and energy, prices rose 0.4%.

Last month's producer price index rose 1.3% year-on-year, centered on services and agricultural, forestry, and fishery products, marking six consecutive months of increase.

Last month's domestic supply price rose 1.4% month-on-month. Raw materials fell (-1.5%), but intermediate goods (0.6%) and final goods (0.8%) both increased.

The total output price index for January, which adds exports to domestic shipments, rose 1% month-on-month. Agricultural, forestry, and fishery products rose 3.8%, and manufactured goods also rose 1.1%.