Farm and factory gate inflation, as measured by the annual change in the producer price index (PPI), slowed sharply to 4.2% in February from 5.1% in January. This was far more than the economists’ consensus, which was it would slow a fraction to about 5%. The index, which was set to 100 in December 2017, was 105.2 in February, indicating a month-on-month deflation from January when it was 105.5 points, Statistics SA reported on Thursday. Petrol prices fell 2.3% and diesel prices 1.4% from January to February. Over the year, however, petrol prices increased 3.7% and diesel prices increased 8.2%. Items which got cheaper for manufacturers in February from the same month in 2016 included grain mill products, which fell 17.2%; sugar, which fell 14.9%; and animal feeds, which fell 9.9%. Overall food productions costs fell 0.8%. "The increase in VAT in April should not have the same effect on producer inflation than it would on consumer inflation, so producer prices will remain relatively ...
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