Stats SA to release Dec PPI

Thursday, January 28, 2010

Pretoria - Statistics South Africa will today release the Producer Price Inflation (PPI) for December 2009.

PPI, which is the prices of goods leaving factories and mines, eased to -1.2 percent year-on-year in November.

"Rising price pressures in the mining and quarrying component have largely shaped this receding trend, which has been underpinned by upward pressure on agricultural prices," said Standard Bank.

In turn, the manufacturing price component has been lagging these two sectors on account of rand-induced deflation and excess capacity.

The bank said this is expected to continue in December, while developments in the former two components should largely offset each other.

"We expect mild upward pressure in the agricultural component to have continued in December, driven by vegetable prices, oil seeds and fruits and nuts.

"On balance, PPI is expected to rise by 0.1 percent month in month, taking the annual reading to 0 percent year-on- year in December," said Standard Bank.

Nedbank forecasts that PPI will come in at 0.8 month-on-month due to the steady increases in commodity prices.