Farm gate inflation rises as overall PPI declines

Producer price inflation (PPI), which represents inflation at the factory gate, for manufactured goods slowed to 7,2% in August, according to Statistics SA.

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PPI for agriculture, forestry and fisheries rose to 4,2% in August, compared with 3,9% the previous month. Within manufactured goods, the biggest gainers in the food basket were fish (16,4%), dairy products (12,7%) and meat (11,1%).

The slowdown in August’s overall PPI inflation rate could mainly be attributed to lower Brent crude oil prices and the lack of pass-through inflationary pressures arising from last year’s sharp depreciation in the rand exchange rate, according to Deon Fourie, an economist at Econometrix.

“The slowdown in PPI inflation augers well for subdued CPI inflation in coming months,” he told Farmer’s Weekly.

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