South African producer prices for all commodities rose by 1,3% in the 12 months to June from a 1,2% y/y increase in May and April’s 0,2% y/y decline, Statistics South Africa (Stats SA) said on Thursday. On the month, the PPI was up 1,6%, compared with no monthly change in May.
South Africa’s May 2004 PPI ended the y/y deflation trend that began in September 2003, when the index posted the first y/y deflation since World War II.
South Africa’s June 2004 producer price index (PPI) was expected to stay at a 1,2% y/y increase, echoing the consumer price index excluding mortgage changes (CPIX), which is used by the South African Reserve Bank (SARB) for its inflation target, which stayed at 4,4% y/y for the months of March, April and May.
According to an I-Net Bridge survey of economists the range was from 0,3% y/y to 2,2% y/y.
Stats SA said the higher annual rate in June 2004 compared with that in May 2004 could be explained by increases in the annual rates of change in the production price indices for:
Products of petroleum and coal, of which the rate increased from +6,9% in May 2004 to +20,2% in June 2004.
Electricity, of which the rate increased from +2,1% in May 2004 to +4,3% in June 2004.
Non-electrical machinery and equipment, of which the rate increased from 2,4% in May 2004 to 2,2% in June 2004.
However the higher annual rates of change were partially counteracted by decreases in the annual rates of change in the production price indices for:
Mining and quarrying products, of which the rate decreased from +13,4% in May 2004 to +9,4% in June 2004.
Food at manufacturing, of which the rate decreased from +0,1% in May 2004 to -0,9% in June 2004.
The annual increase of 1,3% in the PPI for all commodities for South African consumption is due to an annual increase in the price index for locally produced commodities (+2,4 percentage points), which was partially counteracted by an annual decrease in the price index for imported commodities (-1,1 percentage points).
The annual rate of increase in the PPI for locally produced commodities for consumption in South Africa is 3,3% in June 2004 (i.e. the PPI in June 2004 compared with that in June 2003), which is 0,8 of a percentage point higher than the corresponding annual rate of 2,5% in May 2004 (i.e. the PPI in May 2004 compared with that in May 2003).
The annual increase of 3,3% in the PPI for locally produced commodities for consumption in South Africa is due to relatively large annual increases in the price indices for mining and quarrying products (+0,7 of a percentage point), products of petroleum and coal (+0,7 of a percentage point, beverages (+0,4 of a percentage point), basic metals (+0,3 of a percentage point) and electricity (+0,3 of a percentage point).
These annual increases were partially counteracted by annual decreases in the price indices for food at manufacturing (-0,1 of a percentage point), textiles and made-up goods (-0,1 of a percentage point) and paper, paper products and printing (-0,1 of a percentage point).
The PPI for imported commodities shows an annual rate of decrease of 4,1% at June 2004 (i.e. the PPI at June 2004 compared with that at June 2003).
This rate is 1,4 percentage points lower than the corresponding annual rate of 2,7% in May 2004 (i.e. the PPI in May 2004 compared with that in May 2003).
From May 2004 to June 2004 the PPI for imported commodities decreased by 0,7%, while the seasonally adjusted index increased by 0,3%.
Stats SA said the annual decrease of 4,1% in the PPI for imported commodities is due to relatively large annual decreases in the price indices for non-electrical machinery and equipment (-0,9 of a percentage point), office, accounting and computing machinery (-0,7 of a percentage point), chemicals and chemical products (-0,6 of a percentage point) and transport equipment (-0,5 of a percentage point). These annual decreases were slightly counteracted by an annual increase in the price index for basic metals (+0,1 of a percentage point). – I-Net Bridge