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Higher commodity prices push PPI to 11.2% in May

28 Jun 2022, 00:00 AM SGT

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Higher commodity prices push PPI to 11.2% in May
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KUALA LUMPUR (June 28): Malaysia’s Producer Price Index (PPI), which measures the prices of goods at factory gate, remained high at a rate of 11.2% in May 2022 as compared to 11.0% in April 2022, according to the Department of Statistics Malaysia (DOSM).

In a statement on Tuesday (June 28), chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the increase in the PPI local production in May 2022 was attributed to the mining index, which increased 20.6% from 18.4% in April 2022.

He said the index of agriculture, forestry and fishing registered an increase of 16.7% (April 2022: 18.0%), mainly led by an increase in indices of growing of perennial crops (21.2%), fishing (11.3%) and growing of non-perennial crops (7.8%).

In May 2022, the manufacturing index registered a double-digit increase of 10.1% for the first time since August 2011 (10.6%), underpinned by an increase in indices of subsectors, namely manufacture of vegetable and animal oils and fats (24.5%), manufacture of refined petroleum products (22.9%) and manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms (13.3%).

In addition, the index of water supply increased 1.2%, while electricity and gas supply decreased 0.6%.

In terms of month-on-month, Mohd Uzir Mahidin explained that in May 2022, the PPI local production increased 1.2% as compared to 0.2% recorded in the previous month.

Commenting on the PPI local production by stage of processing, Mohd Uzir said the index of crude materials for further processing increased 17.3% in May 2022 in comparison to 17.1% in April 2022.

He said the increase was contributed by indices of non-food materials (19.8%), and foodstuffs and feedstuffs (3.8%).

Similarly, he said the index of intermediate materials, supplies and components continued to post higher increase of 13.5% in May 2022 (April 2022: 13.1%) driven by an increase in indices of processed fuel and lubricants (18.7%), materials and components for manufacturing (15.0%), and supplies (5.7%).

Finished goods index also registered an increase in May 2022 with 1.0% (April 2022: 1.1%), attributed by the increase in finished consumer foods (6.5%) index.

Mohd Uzir explained that the double-digit increase in PPI in Malaysia was in line with the rise in inflation at the producer level for selected countries which was affected by supply shortages, mainly raw materials due to lockdown ease, opening of economy as well as the war between Russia and Ukraine.

He said inflation at the producer level for the United Kingdom increased 15.7% in May 2022, up from 14.7% in April 2022.

He said the increase was driven by higher prices for fuel and raw materials which rose more than 22.0% annually.

“Similarly, rising prices of gasoline and energy products contributed to a 10.8% increase in the inflation at the producer level for the United States in May 2022.

“A similar situation happened in Southeast Asia countries such as Thailand, where its producer-level inflation recorded a 13.3% increase in May 2022 (April 2022: 12.8%). The increase was contributed by increases in the manufacturing and mining sectors,” he said.

Source: https://www.theedgemarkets.com