Rising Apple and Cabbage Prices... Producer Prices Increase for Four Consecutive Months

Bank of Korea March Producer Price Index Rises 0.2% MoM
Cabbage Up 36%, Onion Up 18.9% MoM
Apple Up 135.8%, Cabbage Up 51.6% YoY

Prices of agricultural products such as apples, napa cabbage, and cabbage have risen, causing the Producer Price Index (PPI) to show an upward trend for four consecutive months. Producer prices typically reflect consumer prices with a time lag.

According to the "March 2024 Producer Price Index (Provisional)" released by the Bank of Korea on the 23rd, the PPI in March rose by 0.2% compared to the previous month. Compared to the same month last year, it increased by 1.6%.

The PPI decreased in October (-0.1%) and November (-0.4%) of last year compared to the previous month, then rose in December (0.1%), January (0.5%), February (0.3%), and March (0.2%) of this year, showing an upward trend for four months in a row.

Compared to the same month last year, the PPI has continuously increased for eight months, rising 1.0% in August, 1.4% in September, 0.7% in October, 0.6% in November, 1.2% in December, 1.3% in January, 1.5% in February, and 1.6% in March.

Looking in detail, prices of agricultural, forestry, and fishery products, manufactured goods, electricity, gas, water, and waste all increased, while services remained flat compared to the previous month.

Agricultural, forestry, and fishery products rose 1.3% month-on-month, with increases in agricultural products (0.4%), livestock products (2.0%), and fishery products (1.6%).

By item, agricultural products saw increases in napa cabbage (36%) and onions (18.9%) compared to the previous month. Notably, apples rose 135.8% and cabbage 51.6% compared to the same month last year.

Livestock products increased with pork (11.9%) and chicken (1.2%) rising month-on-month.

Fishery products saw a 19.8% increase in gim (seaweed) month-on-month, while frozen squid (42.4%) and gim (42.4%) rose compared to the same month last year.

Yoo Sung-wook, head of the Price Statistics Team at the Bank of Korea’s Economic Statistics Bureau, explained, "The export volume of gim has significantly increased, reducing domestic supply and causing prices to rise."

Manufactured goods rose 0.3% month-on-month, with increases in coal and petroleum products such as naphtha (4.6%) and bunker C oil (4.0%) (0.5%), chemical products (0.6%), and primary metal products (0.7%).

Electricity, gas, water, and waste increased 0.3% month-on-month, led by industrial city gas (2.6%).

In services, transportation services fell by 0.5%, but restaurant and accommodation services (0.3%) and financial and insurance services (0.6%) rose, resulting in a flat overall change compared to the previous month.

By special classification, food products rose 0.6% month-on-month, and fresh food increased 1.1%. Energy remained flat, IT rose 0.1%, and other than food and energy increased 0.2%.

The Domestic Supply Price Index, which combines the Producer Price Index and the Import Price Index, rose 0.2% month-on-month as raw materials (0.8%) and intermediate goods (0.3%) increased, despite a 0.1% decrease in final goods.

The Total Output Price Index, which combines the Producer Price Index and the Export Price Index, rose 0.3% month-on-month, with increases in agricultural, forestry, and fishery products (1.1%), manufactured goods (0.5%), and electricity, gas, water, and waste (0.3%).