Malaysia’s PPI rises 3.5% in December – DOSM

Malaysia’s Producer Price Index (PPI) rose 3.5 per cent in December 2022 compared to the 3.2 per cent expansion in November, the Department of Statistics Malaysia (DOSM) reported today.

The PPI measures the prices of goods at the factory gate.

Chief statistician Malaysia Datuk Seri Mohd Uzir Mahidin said all sectors posted an increase except for the agriculture, forestry and fishing sector, which recorded a decrease of 17.5 per cent in December 2022 (November 2022: -18.5 per cent). 

“The contraction in the index for the growing of perennial crops (-27.3 per cent), which recorded a double-digit decline for six consecutive months, contributed to the decrease in this sector,” he said in a statement. 

However, Mohd Uzir said the manufacturing sector increased by 6.1 per cent (November 2022: 6.2 per cent), attributed to the increase of 14.2 per cent in the indices of the manufacture of coke and refined petroleum products, followed by the production of computers, electronics, and optical products (9.3 per cent) and chemicals and chemical products (3.1 per cent). 

“The mining sector also registered an increase of 3.7 per cent (November 2022: 2.4 per cent). The water supply and electricity and gas supply sectors recorded an increase of 3.8 per cent and 1.0 per cent, respectively,” he added.

For month-on-month comparison, he said PPI local production dropped 0.3 per cent in December 2022 compared to 0.6 per cent in the previous month due to the decrease in agriculture, forestry and fishing index. 

For PPI local production by stage of processing, Mohd Uzir said the index of crude materials for further processing index continued to decrease by 7.7 per cent in December 2022 (November 2022: -8.5 per cent) due to the decline of 9.4 per cent in non-food materials. 

“However, intermediate materials, supplies, and components increased by 7.2 per cent in December 2022 (November 2022: 7.7 per cent) owing to the increase in processed fuel and lubricants (15.3 per cent), supplies (12.4 per cent) and materials and components for manufacturing (2.8 per cent),” he said. 

In the fourth quarter (Q4) of 2022, PPI local production recorded an increase of 3.5 per cent (Q3 2022: 6.5 per cent), due to the manufacturing (6.6 per cent), water supply (4.3 per cent), mining (1.8 per cent), and electricity and gas supply (1.2 per cent) indices, while, agriculture, forestry and fisheries index fell 18.1 per cent. 

“In 2022, PPI local production increased by 7.8 per cent, slightly lower than the 9.5 per cent in 2021.

“In the first half of 2022, PPI local production accelerated, specifically crude palm oil and crude oil due to the Russia-Ukraine war,” he said.

The increasing cost of animal feed and fertiliser also contributed to the increase in PPI local production.

However, PPI local production began to moderate in June 2022 due to the decline in crude palm oil prices that reached RM3,000 per kg in the second half of 2022. 

“This was partly due to the lower global demand resulting from the opening of Indonesia’s palm oil exports and demand for vegetable oils,” he noted. 

Nevertheless, Mohd Uzir said finished consumer food prices showed an upward trend compared to 2021 due to high raw material costs, despite a moderation starting in November 2022. — BERNAMA