Korea’s producer price gains in July on higher prices of agricultural products

[Photo by Yonhap]

South Korea’s producer price index (PPI) rose for the first time in four months in July as the prices of agricultural products gained more than 10 percent due to the heavy rainfall.

According to data released by the Bank of Korea on Thursday, the country’s PPI, which measures changes in the price of goods and services produced in the domestic market with 2015 as the base year, came to 120.14 in July, up 0.3 percent from a month earlier.

The index had experienced a decline for three months, with a 0.1 percent fall in April, a 0.4 percent in May, and a 0.2 percent in June, before heading north in July.

Against a year-ago period, the index is 0.2 percent lower.

Prices of agricultural and fishery products increased 4.7 percent in July from the previous month. The heavy rainfall and heatwave significantly contributed to a 10.6 percent increase in the prices of agricultural products and 0.8 percent in livestock products. Prices of fishery products, on the other hand, fell 4.2 percent.

Prices of industrial goods were mixed.

Prices of chemical products fell 0.6 percent, while those of coal and petroleum products increased by 3.7 percent amid rising oil prices, resulting in an overall increase of 0.1 percent.

Prices of electricity, gas, water, and waste disposal fell 0.5 percent in July due to a 12.7 percent decline in residential electricity costs resulting from the application of lower-tiered electricity rates during the summer.

Services, on the other hand, saw a 0.3 percent rise, driven by heightened demand during the holiday season. In particular, the price of transportation services were up 0.9 percent, and restaurant and accommodation services 0.5 percent.

Domestic supply price index, which measures price fluctuations of goods including imported items, fell 0.3 percent compared to the previous month.

Prices for raw materials and intermediate goods fell 1.4 percent and 0.5 percent, respectively, while prices of final goods jumped 0.4 percent.

Total output price index that covers domestic shipments and exports rose 0.1 percent in July from June, data showed.