Producer price indices - 3. quarter of 2004
Product Code: e-7032-04
Producer price indices in the 3rd quarter of 2004
Crop product prices were particularly affected by higher prices of cereals (+12.4%). Prices of fruit were up 4.2% in total (+16.1% in the 2nd quarter) due to higher prices of table apples and strawberries, whereas prices of currant and industrial apples dropped. Prices of vegetables fell by 17.2% (as against an increase of 8.1% in the 2nd quarter). Prices of onion, tomatoes and cabbage decreased. The biggest y-o-y change was recorded for potatoes (-25.4%, compared to +117.3% and +84.3% in the 1st and 2nd quarters, respectively).
Animal product prices were mainly pushed up by prices of pigs (+14.3%) and milk (+3.9%); both have been rising only since the 2nd quarter, they were still decreasing in the 1st quarter. Prices of cattle for slaughter saw the same development and were by 11.1% higher in the 3rd quarter. The trend of egg prices was quite opposite – only +0.8% in the 3rd quarter, and +37.7% and +23.7% in the 1st and 2nd quarters, respectively.
Industrial producer prices have been growing at an unprecedented way in 2004, reaching 7.8% in total for the whole 3rd quarter of 2004. The growth accelerated to 8.1% in August and was the highest over last eleven years (high increase 8.0% continued in September). Behind the growth of the overall price level were particularly rising prices in ‘basic metals and fabricated metal products’ and ‘coke and refined petroleum products’; these products represent basic manufacturing inputs in the entire economy.
Prices in ‘basic metals and fabricated metal products’ rose by 25.7% y-o-y in total in the 3rd quarter. These prices started to go up at the beginning of the year and the growth escalated in September when it exceeded the 25% level and reached 28.3%. Within this, prices of basic iron, steel and ferro-alloys grew fast (being up to 56.2% higher y-o-y). Prices of cast-iron and steel tubes rose by 32.6% and of other first processed iron and steel by 37.6%. This sharp increase was linked with the world price development where demand for metals went up and raised prices to a high level. The steep growth potential of metal prices in the world, connected with economic growth in China and economic recovery in west Europe, had an impact on prices in the Czech Republic. Import prices of metal ores coming in the country rose considerably, being up to 75.5% higher y-o-y in July 2004. Prices of secondary metal raw materials sold in the Czech Republic increased markedly too.
A dramatic price rise was reported for ‘coke and refined petroleum products’; their prices were up 45.0% on average y-o-y. Prices of both refined petroleum products and coke were on the increase. Petroleum prices on world markets grew more than ever before, petroleum selling for more than 40 USD/barrel in August 2004. Oil Brent (London) sold for 41.80 USD/barrel on average in August, compared with 29.46 USD/barrel in August 2003. September 2004 saw amazing 42.62 USD/barrel (American light petroleum cost more than 50 USD/barrel at the end of September). Soaring were also prices of coke products.
Other energy inputs became more expensive too. Prices of ‘electrical energy, gas, steam and water’ were up 4.8% y-o-y, of which electricity incl. distribution 6.5% and heat energy 0.6%.
Prices of chemical products and man-made fibres rose; they grew throughout 2004 and increased by 11.7% in the 3rd quarter. Prices of basic chemical substances went up in particular (+22.3%), responding to higher petroleum prices on world markets.
Significantly higher were prices of ‘food products, beverages and tobacco’ (+5.8% on average in the 3rd quarter). Mainly prices of grain mill products, starches and starch products (+15.1%) and prices of prepared animal feeds (+10.8%) rose. Both these prices started to go up in 2003, after a low harvest. In September 2004, however, effects of the low harvest subsided and impacts of the 2004 good harvest, reducing y-o-y price increases, began to be apparent. Price of wheat, which is the decisive raw material input, dropped to CZK 3 101/tonne in September 2004, compared to CZK 3 476/tonne paid to agricultural producers a year earlier. Prices of wheat at world markets fell too, to 309.59 USc/bushel (Chicago) in August 2004 from 362.04 USc/bushel paid in August 2003.
Prices of meat and meat products were by 6.3% higher y-o-y in the 3rd quarter, prices of dairy products by 5.8%.
In 2004, the differentiation of growth rates of prices among individual industrial CZ-NACE activities widened. In contrast to the marked price increases in basic raw material and energy inputs, prices in many manufacturing activities grew only slightly and the highly competitive environment prevents them from increasing more.
Construction prices were considerably higher y-o-y due to increases in prices of steel and petroleum products. Construction work prices rose by 4.6% in the 3rd quarter (+2.5% and +3.8% in the 1st and 2nd quarters, respectively). Prices of construction material inputs accelerated their growth even more, being by 8.0% higher in the 3rd quarter (+1.8% and +5.1% in the 1st and 2nd quarters, respectively).
In terms of y-o-y comparison, prices of market services grew at the same rate as in the 2nd quarter, i.e. by 2.5%. Of a decisive effect on development of the overall price level were particularly real estate, renting and business services (+3.3%). Within this section, especially prices of advertising services (+7.4%) and computer and related services (+6.5%) were up. A marked growth was reported for prices of exhibition and fair service activities (+15.3%). Prices in financial intermediation services, except insurance and pension funding services, grew by 3.1% y-o-y, particularly due to higher prices of monetary intermediation services (+7.4%); leasing prices fell by 3.4%. Prices in insurance and pension funding services rose by 1.6% (prices of property fire insurance +4.6%, motor vehicle insurance +1.2%, farm crops insurance +3.1%; theft insurance prices did not change). Prices of post and telecommunication services were by 0.1% higher in total. Prices of inland goods transport grew by 1.0%, affected by prices of goods transport by road (+2.9%), whereas prices in railway goods transport stagnated.
