THE producer price index (PPI) for local production increased 12.6% year-on-year (y-o-y) in November 2021, as opposed to a decline of 3.0% in the same month last year, mainly due to the surging cost of raw materials, said the Department of Statistics Malaysia.

Chief statistician Mohd Uzir Mahidin said the increase in November 2021 was attributed mainly to the mining index that soared 71.2% in contrast to a 45.8% decline in November 2020, driven by higher prices for crude oil and natural gas.

“The agriculture, forestry and fishing index also increase but at a slower rate of 19.1% (November 2020: 21.5%), largely due to the increase in the indices of oil palm fresh fruit bunches (25.2%), chicken (18.1%) and hen’s eggs (8.3%),” he said in a statement today.

In addition, he said the manufacturing index rose 8.4% in November 2021, contributed by the indices for subsectors of manufacture of refined petroleum products (26.2%) and manufacture of vegetable and animal oils and fats (21.9%), while water supply index increased marginally by 0.2% and the index of electricity and gas supply declined 0.3%.

In terms of a month-on-month comparison, Uzir said the PPI local production rose 1.4% in November 2021, driven by a 5.9% rise in agriculture, forestry and fishing index, mainly contributed by the indices of growing of perennial crops (8.3%), growing of non-perennial crops (3.0%) and animal production (1.2%).

“The index of oil palm fresh fruit bunches remained virtually unchanged over concerns of insufficient migrant labour in Malaysia’s plantations.

“On the other hand, the price of crude oil slumped due to the discovery of the Omicron variant, which led to fears of its spread hence slowing demand for the commodity.

“This contributed to a 2.3% drop in mining index as opposed to a 5.5% increase recorded last month,” he said.

In addition, he said the manufacturing index grew 1.3%, among which was due to an increase in indices of manufacture of vegetable and animal oils and fats (2.9%), manufacture of refined petroleum products (2.4%), manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms (1.2%) and the manufacture of basic iron and steel (1.1%) subsectors.

“The utility index showed that the index of electricity and gas supply declined 0.3%, while the water supply index increased 0.9%,” he added.

Uzir said the cold weather, strong winds and heavy rain were the factors in rising costs of commodities, especially vegetables.

“An insufficient number of workers in plantation areas also reduced output, resulting in disruptions in supply leading to increase in prices.

“Recently, heavy downpours caused massive floods in several states. The floods destroyed most of the crops and thus, may result in the supply chain disruptions, which lead to a tendency of pressure on prices,” he said. – Bernama, December 30, 2021.