Rising Prices of Agricultural and Livestock Products Due to High Temperatures and Monsoon... Producer Prices Up 0.2% in July

Bank of Korea 'Producer Price Index for July 2020'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Due to the effects of the monsoon season and high temperatures, prices of agricultural and livestock products have risen, and with the rebound of previously declining international oil prices, the producer price index in July increased by 0.2% compared to the previous month.

According to the Bank of Korea's "Producer Price Index for July 2020" released on the 21st, the producer price index for July was 102.68, up 0.2% from the previous month (102.48). This marks the second consecutive month of increase.

Prices of agricultural, forestry, and fishery products rose overall by 3.7%, as agricultural product prices increased by 6.0% due to sustained high temperatures and reduced shipments caused by the monsoon, and livestock product prices rose by 3.3% amid increased consumption during the vacation season.

Kang Hwan-gu, head of the price statistics team at the Bank of Korea, stated, "Until mid-July, high temperatures and at the end of July, the monsoon influenced agricultural product prices, causing increases mainly in lettuce and tomatoes," adding, "In August, the monsoon is expected to have an even greater impact than in July, leading to further rises in agricultural product prices."

Looking at detailed items, the producer price of lettuce jumped by 66.3% compared to the previous month, cabbage prices rose by 21.2%, and apples increased by 11.0%. Livestock products with increased producer prices include beef (4.2%), pork (3.1%), and chicken (3.4%).

In the case of manufactured goods, with the rebound in oil prices, coal and petroleum products (4.8%) and primary metal products (0.8%) rose, resulting in a 0.4% increase compared to the previous month.

For electricity, gas, water, and waste prices, electricity, gas, and steam prices fell by 5.4%, leading to an overall 4.1% decrease compared to the previous month. This was influenced by the implementation of a permanent summer electricity rate reduction system and the decline in liquefied natural gas (LNG) import prices, which caused city gas rates to drop.

Service producer prices rose by 0.3% compared to the previous month, influenced by increases in transportation services (1.2%) and restaurant and accommodation services (0.3%).

When compared to the same month last year, the July producer price index fell by 0.8%, continuing a downward trend for five consecutive months.

By special classification, food prices rose by 1.9% compared to the previous month, and fresh food prices increased significantly by 6.8%. Energy prices fell by 2.9%, IT prices rose by 0.2%, and prices excluding food and energy increased by 0.3% compared to the previous month.

The domestic supply price index, which includes imported goods, rose by 0.6% compared to the previous month but fell by 2.8% compared to the same month last year. This increase was centered on raw materials (6.5%) and intermediate goods (0.4%).

The total output price index, which adds exports to domestic shipments, rose by 0.1% compared to the previous month and fell by 1.9% compared to the same month last year.

This content was produced with the assistance of AI translation services.