THE producer price index (PPI) for local production, which measures the costs of goods at the factory gate, continued to register double digit growth in April 2022 at 11.0%, the Department of Statistics Malaysia (DOSM) said.

It was slightly lower than the 11.6% year-on-year (y-o-y) growth recorded in March 2022, the agency said.

In a statement today, chief statistician Mohd Uzir Mahidin said the growth in April was driven mainly by the mining index, which rose 18.4% y-o-y (March 2022: 28.2%).

The index of agriculture, forestry and fishing registered an increase of 18.0% (March 2022: 24.9%), mainly led by an increase in indices of growing of perennial crops (23.8%) and fishing (7.0%).

Meanwhile, the manufacturing index rose 9.8% (March 2022: 8.9%).

“The growth was supported by an increase in indices of subsectors such as the manufacture of refined petroleum products (23.4%), manufacture of vegetable and animal oils and fats (23.4%), and manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms (13.9%),” Uzir said.

The water supply, and electricity and gas supply indices increased by 1.2% and 0.6%, respectively.

On the month-on-month (m-o-m) comparison, Uzir said the PPI for local production in April 2022 increased moderately at 0.2% m-o-m compared to the 2.4% m-o-m growth seen in March.

“The moderate rise was supported by the manufacturing index that increased 1.4%, underpinned by an increase in indices of subsectors for manufacture of vegetable and animal oils and fats (3.6%), manufacture of refined petroleum products (2.4%), and manufacture of electronic components and boards (1.0%),” he said.

However, he noted that the increase in the PPI local production during April 2022 was offset by the 2.9% m-o-m decline in the agriculture, forestry and fishing index (March 2022: +8.6%) due to a drop in the index of oil palm fresh fruit bunches (-4.3%).

“In addition, the mining index also registered a 6.6% decline in April 2022 (March 2022: + 5.0%), attributed to the 8.6% decline in the crude oil index,” he said.

The indices of water, and electricity and gas supply edged up 0.7% and 0.2%, respectively.

On the PPI for local production by stage of processing, Uzir said the index of crude materials for further processing increased 17.1% y-o-y in April 2022 (March 2022: 23.3%).

The increase, he said was contributed by indices of non-food materials (19.9%) and foodstuffs and feedstuffs (2.0%).

The index of intermediate materials, supplies and components also showed growth, rising 13.1% (March 2022: 12.5%), driven by an increase in indices of processed fuel and lubricants (19.5%), materials and components for manufacturing (14.3%), and materials and components for construction (4.5%).

The finished goods index registered a 1.1% increase (March 2022: 0.4%).

In terms of monthly comparisons, the chief statistician said the index of crude materials for further processing contracted 3.5% m-o-m against a 6.7% increase in March 2022 with index of intermediate materials, supplies and components edged up 1.8%, while finished goods index rose moderately 0.3%.

Commenting further, Uzir said that crude oil price fell slightly to US$106 (RM463) a barrel in April 2022 from US$116 per barrel in March 2022 due to several factors, including uncertainties in supply and demand prospects as well as worries over the surge in Covid-19 cases in China, the primary user of the commodity.

The fall was also contributed by the International Energy Agency’s announcement that its 31 member countries agreed on April 1 to another release of oil from emergency reserves in response to the market turmoil caused by Russia’s invasion of Ukraine, he said.

In addition, he said, the price of Malaysia’s primary commodity, which is crude palm oil, also declined from RM6,867 a tonne in March 2022 to RM6,678 a tonnes last month, largely underpinned by subdued global demand besides the weaker prices of other vegetable oils.

“The fall in commodity prices during April 2022 may relieve inflationary pressures. However, prices are seen to be very high and the uncertainties in price trends for the upcoming months are still raising concerns,” he added. – Bernama, May 31, 2022.