Production prices have continued to ease compared to last year, as SA recovers from a drought. The annual change in the producer price index (PPI) slowed to 5.2% in March from 5.6% in February. The PPI was 101.3 points, 0.3% higher than February’s 101 points. The main contributors to the decrease were food products, beverages and tobacco products (2.2 percentage points) and coke, petroleum, chemical, rubber and plastic products (2.2 percentage points). Economists expected deceleration as a result of the strong rand and a drop in food prices with the end of the drought. On Friday, Investec economist Kamilla Kaplan projected that PPI inflation would ease, thanks to better rainfall bringing down the price of food. Kaplan said: "PPI inflation has decelerated mainly on account of lower food price inflation." At 25.17%, the food category makes up the largest portion of PPI. She added: "Manufactured food price inflation is expected to moderate further over the coming months, given the defl...
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