Production costs in April jump on higher commodities, raw materials prices

Crude palm oil (CPO) prices surged to record highs recently.

KUALA LUMPUR: The Producer Price Index (PPI) for local production jumped 10.6% in April due to the low base effect and continued rise in commodity and raw material prices.

The Statistics Department said on Monday the 10.6% increase was 3.9 points higher than 6.7% in March.

Chief Statistician Datuk Seri Dr. Mohd Uzir Mahidin said the increase was due to the mining index which surged 92.4% from 32% in the previous month.

“The sharp rise was mainly due to a low base effect and continued rise in commodity and raw material prices, as a result of the recovery in global demand and various supply constraints, ” he said.

Mohd Uzir said the agriculture, forestry & fishing index continued to increase by 49.8% as compared to 41.1% in April.

The manufacturing and water supply indices also registered an increase of 3.5% and 1.2% respectively. The electricity & gas supply index declined by 0.8%.

“On a monthly basis, the PPI local production registered marginal increase of 0.8% in April 2021 as compared to 0.7% in the previous month, ” he said.

Mohd Uzir said all sectors showed growth momentum with agriculture, forestry & fishing up by 2.8%, mining (1.2%), water supply (0.6%), manufacturing (0.5%) and electricity & gas supply (0.3%).”

For stages of processing, the index of crude materials for further processing surged to 55.8% in April as compared to 31.8% in March 2021.

The index of Intermediate materials, supplies & components also increased by 4.8%.

The finished goods index recorded negative 0.7%, due to lower price in semiconductor related to electric & electronics components and motor vehicles. However, finished goods related to food products rose by 3.8%.