Industrial producer prices did not change this time as declining prices of steel and cars offset rising food prices and an impact of dear oil on prices of chemical production. PPI looks to be fairly stable in recent months despite swings in commodity prices. Inflation in agricultural prices accelerated above 10% in response to the weak harvest of major crops.
This has an impact on food prices as a part of PPI. Namely, prices of flour and fodder surged higher. Oil prices already lifted prices of refinery products in July and August, this time dear oil led to higher prices of chemical production (1.9% mom). Steel prices keep declining in response to declining demand and falling prices of basic inputs (iron ore, coking coal). Sluggish demand is also the reason for lower prices of cars. In other parts of the economy, construction sector as well as services remains in deflation. PPI is likely to stay in the range of 1-2% in coming months unless something unpredictablehappens.
Actual (Sep): 0.0% mom; 1.7% yoy
Consensus: 0.1% mom; 2.0% yoy
Previous (Aug): 0.5% mom; 1.9% yoy