Producer prices rose for the second consecutive month in September, driven by increased agricultural prices ahead of the Chuseok holiday and the end of summer electricity rate reductions, which led to higher residential electricity costs.
According to the Bank of Korea on October 21, the producer price index for September stood at 129.78 (2020=100), marking a 0.2% increase from the previous month’s 129.58. This follows a 0.4% decline in July and a 0.1% increase in August.
A notable rise was observed in agricultural, forestry, and fishery products, which increased by 2.6% compared to the previous month due to heightened demand for agricultural products ahead of Chuseok. Crop prices rose by 3.7%, livestock prices by 2.7%, and fishery prices by 1.0%.
Among specific items, cabbage prices surged by 42.9% from the previous month. Beef prices increased by 10.4%, and flatfish prices rose by 7.5%. In contrast, spinach prices fell by 19.3%. The producer price index for fresh food also rose by 4.1%, significantly outpacing the overall food price increase of 1.1%.
Prices for electricity, gas, water, and waste services also rose by 1.3% from the previous month, largely due to a 13.4% increase in residential electricity prices. Industrial city gas prices also saw a 6.6% rise.
Prices for manufactured goods remained stable compared to the previous month. While prices for coal and petroleum products rose by 0.9% and chemical products by 1.0%, declines in prices for computers, electronics, and optical instruments (-1.7%) offset these increases.
Service prices decreased by 0.1% from the previous month. The end of the summer vacation season led to declines in hotel prices (-6.6%) and accommodation facilities (-15.8%), contributing to a 0.6% drop in restaurant and lodging services. Conversely, financial and insurance services rose by 1.0% due to increased brokerage fees (2.7%) following a rise in stock prices.
The domestic supply price index, which includes imported goods, remained unchanged from the previous month. While raw material prices rose by 3.2%, prices for intermediate and final goods fell by 0.3% each, primarily due to imports.
The total output price index, which includes domestic shipments and exports, decreased by 0.1% from the previous month. Agricultural, forestry, and fishery products saw a 2.6% increase in domestic shipments (2.6%) and exports (0.7%), but manufactured goods prices fell by 0.4%, primarily due to a 0.9% decline in exports.
Looking ahead, international oil prices and energy costs are expected to be key factors influencing producer price trends.
Lee Heung-hoo, head of the Bank of Korea's price statistics team, stated, "While a decline in international oil prices can help lower inflation, increases in city gas rates and airline fuel surcharges are upward pressures. The increase in producer prices in September was not significant compared to the previous month, but rising prices for intermediate goods and industrial city gas could accumulate and exert upward pressure on consumer prices in the future."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.