Malaysia: Producer price index rises 9.7% in February 2022

KUALA LUMPUR: The Producer Price Index (PPI) local production, which measures the costs of goods at factory gate posted an increase of 9.7% in February 2022 as opposed to a 9.2% increase registered in January 2022.

The increase recorded in February 2022 was led by higher prices of primary commodities, according to the Statistics Department.

“The increase in the PPI local production in February 2022 was driven by the mining index that rose 23.3% as opposed to 34.3% recorded in January 2022.

The index of agriculture, forestry & fishing registered a higher increase of 17.7% mainly led by the indices of growing of perennial crops (23.3%), fishing (9.4%) and animal production (4.8%),” chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement.

Similarly, manufacturing index increased 7.9% as compared to 7% recorded in January 2022, supported by an increase in the indices of sub sectors namely manufacture of refined petroleum products

(20.3%), manufacture of vegetable & animal oils & fats (18.6%) and manufacture of basic chemicals, fertilisers & nitrogen compounds, plastics & synthetic rubber in primary forms (13.1%).

In addition, the indices of water supply and electricity & gas supply increased 1.4% and 0.8% respectively.

On a month-on-month comparison, February 2022’s PPI local production increased 2% as opposed to 1.3% recorded in the previous month.

The increase was driven by a 6.9% increase in agriculture, forestry & fishing index, where it was underpinned by higher price of oil palm fresh fruit bunches.

“The index of crude materials for further processing increased 17.7% in February 2022, supported by the indices of non-food materials and foodstuffs & feedstuffs which increased by 20.4% and 3.7% respectively,” Mohd Uzir said.

“Similarly, the index of Intermediate materials, supplies & components continued to register a double-digit increase of 11.4% in February 2022 (January 2022: 10.8%) driven by an increase in the indices of processed fuel & lubricants (18.4%) and materials & components for manufacturing (11.8%).

“However, the finished goods index decreased 0.2% due to a decrease in the index of capital equipment (-1.8%),” he added.

Mohd Uzir said the disruptions on the global supply chain mainly for world primary commodities are expected to worsen due to the Russia-Ukraine tensions.

“Prices for primary commodities and raw materials such as crude oil, semiconductors, fertilisers and natural gas are seen to keep rising as these two countries are among the largest major producers of raw materials.

“Consequently, prices for end products will also increase, leaving consumers especially those in the low-income household groups feeling the pinch,” he said.

Source: https://www.thestar.com.my/business/business-news/2022/03/29/producer-price-index-rises-97-in-february-2022