Malaysia’s January PPI narrows to 0.6% – DoSM

KUALA LUMPUR: The fall in Malaysia’s Producer Price Index (PPI), which measures the prices of goods at the factory gate, has narrowed, declining a marginal 0.6 per cent in January 2024 versus a negative 1.3 per cent in December 2023, the Statistics Department of Malaysia (DoSM) said.

In a statement today, chief statistician Datuk Seri Mohd Uzir Mahidin attributed the decline mainly to the mining sector’s PPI, with a fall that has also narrowed by 1.3 per cent against a 3.4 per cent drop in December 2023, due to a 6.8 per cent drop in the natural gas extraction index.

The PPI comprises indices from five sectors, that is, mining; agricultural, forestry and fishing; manufacturing; electricity and gas supply, and water supply.

January 2024 PPI for manufacturing also improved, declining by 0.9 per cent versus a 1.5 per cent fall in December 2023 while the agriculture, forestry and fishing sector continued to lend support to the overall PPI, rising 3.2 per cent versus a 1.3 per cent growth in December 2023.

The water supply index also posted a 0.6 per cent gain in January versus a 0.4 growth in the previous month, he said.

January’s PPI for the electricity and gas supply sector saw a 0.8 per cent decline versus a 0.6 per cent fall in the prior month, the statement said.

The PPI for the different stages of processing comprises three stages, namely crude materials for further processing, the intermediate stage, and the finished goods stage.

DoSM said: “Crude materials for further processing index rose by 2.3 per cent in January 2024 (December 2023: 0.4 per cent), with the foodstuffs and feedstuffs index posting a 3.5 per cent gain.

“The finished goods index was up by 0.5 per cent (December 2023: 1.1 per cent), due to a rise in the capital equipment (1.4 per cent) index.

“On the other hand, the intermediate materials, supplies and components index fell by 2.0 per cent (December 2023: -3.0 per cent) due to processed fuel and lubricants (-12.9 per cent) and materials and components for manufacturing (-1.1 per cent) indices,” he said.

Mohd Uzir also said crude palm oil (CPO) was traded at RM3,800 per tonne in January 2024 versus Malaysian Palm Oil Council’s (MPOC) projection of RM4,000 per tonne for 2024.

“The positive outlook for CPO prices in 2024 was due to changing supply and demand patterns in Indonesia as well as seasonally low output and the El Nino impact.

“However, the January price was influenced by lukewarm demand from major importing countries and price competition from sunflower and rapeseed oil in the previous month,” he said. – BK