South Korea’s producer prices rose on month for the third consecutive month in April, primarily due to strong global oil prices and a spike in livestock prices.
The country’s producer price index (PPI) in April gained 0.3 percent to 103.67 against the previous month, according to Bank of Korea data released on Tuesday. The PPI had slipped for four straight months until January but reversed its course and stayed on the upward track since February.
Against a year ago period, the PPI was up 0.6 percent in April.
PPI picked up mainly due to the strong international oil prices, according to the central bank. Prices of Dubai crude, the nation’s benchmark, averaged $72.13 per barrel in April, up 6.7 percent against previous month.
Prices of factory produces gained 0.3 percent from a month earlier. In particular, coal and petroleum products prices soared 4.1 percent on month to drive up the overall PPI. Gasoline price jumped 9.9 percent and diesel price rose 2.6 percent over the same period.
Prices of agriculture, forestry and fishery products added 1.3 percent on month. Pork prices jumped 13.5 percent as demand for locally-raised pork surged amid reduced imports on the rapid spread of deadly African swine fever that has decimated Chinese pig counts. Egg prices also bounced 39.5 percent on month on higher demand for Easter.
Service prices increased 0.2 percent from the previous month, led by a rise in parcel delivery service charges. Prices of parcel delivery service leaped 49.9 percent, charter bus fee rose 5.7 percent, and taxi fare gained 1.3 percent against the previous month.
Separately, the central bank said it changed the base year for PPI to 2015 from 2010 in April. The bank resets a reference year every five years to better match the producer prices to the country’s other major economic indices. In 2010, the bank also had adopted the use of weighted method, which computes the index by adjusting items and their weighted value every year, to better reflect the current market conditions. Previously, it derived the PPI on fixed terms.
By Kim Yeon-joo and Cho Jeehyun
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