MALAYSIA'S PRODUCER PRICE INDEX RISES 1.4% IN MAY 2024 - DOSM

Malaysia's Producer Price Index (PPI), which measures the price changes of goods at the producer level, increased by 1.4% 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%, from a double-digit increase of 10% in the previous month, contributed by extraction of crude petroleum of 7.2% and extraction of natural gas (4.6%) indices.

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

“At the same time, the manufacturing sector increased further by 1% (April 2024: 0.8%) due to the manufacture of computer, electronic and optical products index (9.6%),” Mohd Uzir said.

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

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

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

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

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

“The electricity and gas supply and water supply indices remained positive, recording increases of 1.1% and 1.4%, 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% increase from May 2023 but an 8.3% 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 4%, while soybean oil's production is 422 million tonnes, an increase of 6% 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.