Malaysia's Producer Price Index Rises 1.4% in May 2024

Malaysia’s Producer Price Index (PPI), which measures the price changes of goods at the producer level, increased by 1.4 per cent year-on-year (y-o-y) in May 2024, from 1.9 in the previous month, said the Department of Statistics Malaysia (DoSM).

In the latest monthly PPI Local Production for May 2024 report, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said all sectors registered an increase in May 2024, similar to the previous month.

He said the mining sector continued to increase by 6.6 per cent, from a double-digit increase of 10 per cent in the previous month, contributed by extraction of crude petroleum of 7.2 per cent and extraction of natural gas (4.6 per cent) indices.

"The agriculture, forestry and fishing sector went up by 1.3 per cent (April 2024: 5.4 per cent), with the index of animal production and growing of perennial crops up by 3.7 per cent and 3.1 per cent, respectively.

"At the same time, the manufacturing sector increased further by one per cent (April 2024: 0.8 per cent) due to the manufacture of computer, electronic and optical products index (9.6 per cent),” Mohd Uzir said.

He also said that the water supply index went up 8.7 per cent, while the electricity and gas supply index increased by 1.5 per cent.

Mohd Uzir said on a monthly basis, the PPI Local Production was reduced by 0.9 per cent from an increase of 0.5 per cent recorded in April 2024.

The mining sector declined by 5.5 per cent (April 2024: 2.1 per cent) attributed to the extraction of crude petroleum (-6.8 per cent) and extraction of natural gas (-1.7 per cent) indices.

Additionally, the agriculture, forestry and fishing sector decreased by 4.6 per cent, from a 0.7 per cent increase in the previous month, largely due to the growing of perennial crops (-7.8 per cent) index.

"The manufacturing sector also contracted marginally by 0.1 per cent (April 2024: 0.3 per cent) due to the manufacture of coke and refined petroleum products (-2.5 per cent).

"The electricity and gas supply and water supply indices remained positive, recording increases of 1.1 per cent and 1.4 per cent, respectively,” he said.

The chief statistician noted that the average price of crude palm oil (CPO) was RM3,902.50 per tonne in May 2024. This marked a 2.8 per cent increase from May 2023 but an 8.3 per cent decrease from the April 2024 price.

Citing MIDF research, Mohd Uzir said the price momentum subsided earlier than expected, returning to February 2024 prices as the risk of hot and dry weather has lessened.

In the meantime, the global production of grain in the year 2024/25 is projected to increase to 687 million tonnes, an increase of four per cent, while soybean oil’s production is 422 million tonnes, an increase of six per cent on a yearly basis.

"This will push the price of vegetable oil and soybean oil to a downward trend, including the risk of reduced supply.

"They (MIDF research) also projected that CPO prices would be at RM3,600 per tonne throughout 2024, lower than the forecast of around RM3,900 to RM4,200,” he added. - Bernama