Malaysia’s Producer Price Index down 0.6% in January

PETALING JAYA: Malaysia’s Producer Price Index, which measures the prices of goods at the factory gate, declined 0.6% in January 2024 from a negative 1.3% in December 2023, the Department of Statistics Malaysia reported yesterday.

Chief Statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said the mining sector decreased by 1.3% (December 2023: -3.4%), affected by the drop in the index of extraction of natural gas (-6.8%). At the same time, the manufacturing sector decreased by 0.9% (December 2023: -1.5%) due to the decline in manufacture of coke & refined petroleum products (-11.3%) and manufacture of food products (-3.6%) indices.

The electricity & gas supply sector continued to decline by 0.8% (December 2023: -0.6%). Nevertheless, the agriculture, forestry & fishing sector went up by 3.2% (December 2023: +1.3%), contributed by animal production (5.4%) and growing of perennial crops (3.6%) indices. The water supply index posted an incline of 0.6% last month (December 2023: 0.4%).

Malaysia’s crude palm oil was traded at RM3,800 in January 2024, despite the Malaysian Palm Oil Council’s projection of a higher average of RM4,000 per tonne for 2024.

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

However, the January price was influenced by lukewarm demand from major importing countries and price competition from sunflower and rapeseed oil compared to the previous month. Apart from that, the prices of chicken and eggs in the market are expected to rise following the increase in water tariffs across the country starting on Feb 1. The National Poultry Breeders’ Association projected the production cost would increase by 11% to 20% or at least 25 sen per kilogramme.

Commenting on the PPI local production by stage of processing, Mohd Uzir said, “The crude materials for further processing index increased by 2.3% in January 2024 (December 2023: 0.4%), with the foodstuffs & feedstuffs index posting an increase of 3.5%. The finished goods index inched up by 0.5% (December 2023: 1.1%), attributed to the increase in the capital equipment (1.4%) index.

However, he added, the intermediate materials, supplies & components index decreased by 2% (December 2023: -3%) due to processed fuel & lubricants (-12.9%) and materials & components for manufacturing (-1.1%) indices.