Korea’s producer prices soften in June on easing in oil prices on top of sluggish demand

2019.07.19 11:40:22 | 2019.07.19 11:45:03

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South Korea’s producer prices softened in June, reversing from a five-month strengthening streak due to easing in oil and farming goods prices.

According to data released by the Bank of Korea on Friday, Korea’s producer price index (PPI) in June fell 0.3 percent to 103.49 from the previous month. The PPI was up 0.1 percent against a year-ago.

Weak global oil prices have driven down costs for producers and service providers, the central bank said.

The price of Dubai crude, the country’s benchmark that makes up nearly 85 percent of total oil imports, averaged $61.78 per barrel in June, down $7.6 from a month ago.

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Prices of factory produces declined 0.6 percent from a month earlier. Coal and petroleum products prices lost 6.5 percent on month to drive down the overall PPI. Gasoline prices were off 10.8 percent, and naphtha 14.1 percent. Chemical products prices were down 0.4 percent, and computers/electrical and optical devices prices also 0.4 percent. DRAM prices contracted 5.3 percent on increased inventory levels from poor demand.

Prices of agricultural, livestock and fishery products dropped 0.5 percent on increased crop yield. Potato prices plunged 47.5 percent, watermelon 17.1 percent, and Korean melon 18.8 percent.

Service prices remained unchanged from the previous month, led by a rise in auto insurance costs. Prices of car insurance gained 1.5 percent, while charter bus fee slid 5.1 percent and mobile communication fee 0.1 percent.

By Lee Yu-sup and Lee Ha-yeon

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