Increase mainly due to food
processing and crude oil price increases
Y-o-y PPI inflation increased 0.9% from 13.2% in February to 14.1% in
March. Food prices at the manufacturing level increased by a substantial 3.2% m-o-m,
taking the y-o-y food manufacturing inflation rate up from 21.4% in February to 24.5% in
March (compared with just 9.1% in September 2001). There is still scope for food inflation
at the manufacturing level to rise further in coming months. Another contribution to the
rise in PPI in March was a whopping 12.5% m-o-m increase in the PPI for "other
agriculture", ie besides food.
The PPI for other minerals, as a proxy for the imported price of crude
oil, increased by a substantial 6.4% m-o-m in March and contributed to 0.2% of the 1.1%
m-o-m increase in overall PPI . |
|
The 6.4% increase in the cost of crude oil reflected in the March PPI
unfortunately represents only about 20% of the y-o-y increase in the Rand price of crude
oil which took place over the February/March period. As a consequence, one must expect
significant further increases in the contribution of rising oil prices to PPI inflation in
coming months. Excluding
food and oil, PPI rises only 0.6% m-o-m
The y-o-y inflation rate for this time series similarly increased fairly modestly, from
11.2% in February to 11.6% in March. This is due to the fact that the cost of electricity,
which accounts for 4.17% of the overall PPI, declined in absolute terms by 2.8% m-o-m in
March, reducing the m-o-m increase in overall PPI by 0.1%. The general increase in
producer prices which can be expected in April is likely to be substantially higher. |
