Factory gate prices rose to their fastest levels in six months in January, driven largely by fuel prices, according to data released by Stats SA on Thursday.

Producer price inflation increased 4.6% from a year before, slightly up on market expectations. A Bloomberg poll of 10 economist’s expectations had pegged the rate to come in at 4.4% on an annual basis.

Producer inflation — as measured by the producer price index (PPI) — records the change in prices of locally produced commodities. January’s print is sharply up from December, when it reached 3.4%. 

On a month-on-month basis, PPI increased by 0.3%, against market expectations of a 0.1% rise.

According to Stats SA, the main contributors to the headline PPI annual inflation rate were the coke, petroleum, chemical, rubber and plastic products sub-component; food products, beverages and tobacco products; and metals, machinery, equipment and computing equipment.

Under the coke, petroleum, chemical, rubber and plastic products sub-component, prices for petrol and diesel rose 16.1% and 11.8%, respectively.

The increases are in line with economists expectations that fuel price base effects would be seen in the data, due to the sharp declines in fuel prices recorded in January 2019.


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