Image Credits: Sime Darby Berhad
Malaysia’s Producer Price Index (PPI) has eased to 0.3% in August 2024, down from 1.3% in July, marking the lowest rate since February of this year. This decline is primarily attributed to reduced prices for primary commodities, according to the Department of Statistics Malaysia (DoSM).
Chief Statistician Datuk Seri Dr. Mohd Uzir Mahidin highlighted that, despite the overall easing, most PPI sectors recorded increases in August, with the notable exception of the mining sector, which faced significant downturns.
The agriculture, forestry, and fishing sectors saw a rise of 2.7% year-on-year, though this was a decline from July’s 3.4%. The perennial crops index notably increased by 6.3%. In the manufacturing sector, growth was recorded at 1%, slightly up from July’s 0.9%. This growth was driven largely by the manufacture of computer, electronic, and optical products, which rose by 5.8%, alongside food products, which increased by 2.3%. Additionally, the water supply sector’s index surged by 8%, while electricity and gas supply rose by 1%.
Conversely, the mining sector experienced a substantial decrease of 8.3% compared to a 2.2% increase in July. This drop was primarily due to declines in natural gas extraction, which fell by 10.1%, and crude petroleum, which decreased by 7.8%.
On a month-to-month basis, local PPI production also saw a decline of 0.9% in August, influenced largely by a 6.8% drop in the mining sector. The agriculture, forestry, and fishing sectors edged down by 2.7%, and the manufacturing sector decreased by 0.2%.
Internationally, the PPI trends varied: the United States saw a 1.7% increase, Japan’s PPI rose by 2.5%, while the UK experienced a modest 0.2% rise. In contrast, China’s PPI contracted by 1.8%, exacerbated by weak domestic demand and falling global commodity prices.
Looking ahead, Mohd Uzir noted that Malaysian commodity prices, particularly oil, are expected to remain volatile due to factors such as potential US recession and geopolitical tensions in West Asia. He also mentioned a decrease in crude palm oil prices for local markets, driven by increased production levels.