South Korea’s producer prices in May stayed flat against a month earlier as rising global oil prices were offset by a fall in agricultural produce prices, suggesting inflation will likely stayed mired in zero territory.
The country’s producer price index was 103.73 in May, unchanged from the previous month, according to the Bank of Korea on Thursday. Compared with a year earlier, it was up 0.4 percent, extending its gains for the 31th month in a row.
Prices of industrial goods added 0.2 percent on month on higher crude oil prices, while prices of agricultural and fishery products fell 2.3 percent.
Among industrial goods, coal and petroleum products saw prices climb 1.9 percent in their fourth straight month of price gains. This was largely due to the 6.0-percent jump in the Dubai crude price in May.
Prices of computers, electronic and optic devices were up 0.6 percent after eight consecutive months of retreat. The BOK attributed this to the slowing pace of the chip price decline and an uptick in the shipment price of tech devices besides semiconductors. DRAM memory chip prices were down 0.5 percent, continuing their decline for the 10th straight month. But the losses were eased compared with a 9.9-percent drop in April amid the weakening won against the U.S. dollar.
Agricultural products posted big price falls as favorable weather led to bumper crops, with prices of tomatoes plummeting 34.5 percent, Korean melons 31.0 percent and onions 29.1 percent.
Hotel and resort prices jumped 3.4 percent and 4.8 percent on month, respectively, as accommodations upped their prices entering the peak summer holidays.
Postal service prices were 3.3 percent higher due to the 50-won increase in postage rates.
The price index for domestic supply, which includes imports, was up 1.0 percent on month. The total output price index, which includes exports, gained 0.7 percent.
By Kim Yeon-joo and Kim Hyo-jin
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