Malaysia’s producer price index down 4.6% in May 2023
KUALA LUMPUR: Malaysia’s Producer Price Index (PPI) contracted at a faster pace of 4.6 per cent year-on-year (y-o-y) in May 2023 compared with the 3.0 per cent drop posted in the preceding month.
The Department of Statistics Malaysia (DoSM) said the slide in the PPI for local production was attributed to the decline in several sectors namely agriculture, forestry and fishing; mining; and manufacturing.
The agency said the agriculture, forestry and fishing sector recorded a larger y-o-y decline of 27.2 per cent in May 2023 (April 2023: -26.0 per cent), mainly due to the oil palm fresh fruit bunches index which continued to drop by 42.4 per cent (April 2023: -40.3 per cent).
The mining sector also posted a double-digit drop of 10.7 per cent (April 2023: -4.7 per cent), with the extraction of crude petroleum index down 18.1 per cent, it said.
“In the meantime, the manufacturing sector marginally declined by 1.1 per cent (versus 0.1 per cent growth in April 2023).
“This was due to the significant decrease in the manufacture of food products index (-9.6 per cent) (which was however) offset by the increase in the manufacture of computer, electronic and optical products index at 6.6 per cent,” it said.
Meanwhile, DoSM said water supply and electricity and gas supply indices edged up 3.0 per cent and 1.2 per cent, respectively.
The PPI slipped 0.4 per cent month-on-month (m-o-m) in May after a 0.2 per cent growth in the previous month.
Commenting on the PPI by stage of processing, DoSM said the crude materials for further processing index fell further by 20.1 per cent y-o-y in May 2023 (April 2023: -17.6 per cent), with the non-food materials index down 24.2 per cent.
The intermediate materials, supplies and components index slipped 1.6 per cent due to the decline in the index of materials and components for manufacturing (-6.2 per cent) and containers (-3.7 per cent).
Meanwhile, the finished goods index went up 3.0 per cent due to the increase in capital requirement (3.8 per cent) and finished consumer goods (2.0 per cent).
On commodity prices, DoSM said they are expected to fall this year, especially energy prices.
It said the volatility of prices affected the producer price indices of most countries.
Additionally, the department said that the crude palm oil prices dived to a lower price recently following Indonesia’s revision to its domestic market obligation policy starting May 1, 2023, to manage the production of local cooking oil and exports.
It noted that Indonesia had made a few changes to several policies, namely reducing the domestic cooking oil target from 450,000 tonnes to 300,000 tonnes, tightening the export ratio from 1:6 to 1:4, and releasing suspended export permits earlier than the original period. – Bernama