Producer Prices in August Up 0.5%... Cabbage Up 80.9%, Hobak Up 172.6% Surge

Bank of Korea 'August Producer Price Index'
Sharp Rise in Agricultural Products Due to Typhoon and Heavy Rain Impact

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] Due to record-breaking heavy rains and typhoons last month, agricultural product prices surged, causing the Producer Price Index (PPI) to rise for three consecutive months compared to the previous month.

On the 22nd, the Bank of Korea announced that the "August Producer Price Index" stood at 103.19 (2015=100 base), up 0.5% from the previous month. However, compared to August last year, it fell by 0.5%, marking a decline for six consecutive months.

Due to the COVID-19 pandemic, producer prices showed a negative trend until April, remained flat in May, and then showed an upward trend for three consecutive months starting in June.

By item, agricultural, forestry, and fishery products rose sharply by 6.1% month-on-month due to weather impacts causing agricultural product prices to surge. Manufactured goods increased by 0.2% month-on-month, driven by rises in primary metal products, coal, and petroleum products.

Kang Hwan-gu, head of the Bank of Korea's Price Statistics Team, stated, "Agricultural product prices rose significantly due to the effects of typhoons and the rainy season," adding, "Manufactured goods producer prices also increased due to rising raw material prices following the rise in international oil prices."

Looking at detailed items, the producer price of cabbage rose 80.9% month-on-month, and pumpkin prices surged by 172.6%. Apple prices also increased by 22.6%. Compared to the same month last year, prices surged for apples (149.7%), cabbage (132.4%), and radish (106.6%).

Although agricultural product prices surged due to typhoons and the rainy season, livestock product prices fell as dining-out demand sharply declined due to the weather. Pork prices dropped by 8.2%, and fresh milk prices fell by 1.0% due to the sharp decrease in meal service demand.

Last month, the service producer price index also rose 0.3% month-on-month, driven by increases in financial and insurance services (1.3%) and restaurant and accommodation services (0.4%). Service prices rose 1.5% compared to the same month last year.

Among detailed service producer price items, financial and insurance prices notably increased. This was due to a 6.1% rise in brokerage commissions in the financial sector, which move in line with stock prices. Restaurant and accommodation services also showed an upward trend influenced by the peak vacation season.

Meanwhile, the Domestic Supply Price Index, which measures price changes including imports, rose 0.3% month-on-month but fell 3.4% year-on-year. Raw materials decreased by 0.4% month-on-month due to a drop in imports despite an increase in domestic shipments, while intermediate goods (0.2%) and final goods (0.4%) rose month-on-month.

The Total Output Price Index, which adds exports to domestic shipments, rose 0.3% month-on-month and fell 2.1% year-on-year.

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