Producer prices rose 0.2% in October, the Bank of Korea said on the 21st. It was the second straight monthly gain after a 0.4% rise in September. Double-digit jumps in prices for DRAM and flash memory used in smartphones drove the increase in producer prices.
According to the Bank of Korea, the producer price index for October was 120.82 (2020=100), up 0.2% from the previous month. The producer price index quantifies changes in prices of goods and services that domestic producers supply to the domestic market. Producer prices this year have shown no clear trend, alternating between rises and declines.
Goods (0.5%) and services (0.5%) led last month's rise in producer prices. Among goods, prices rose for computer, electronic and optical products (3.9%) and primary metal products (1.3%). Among detailed items, DRAM (28.1%) and flash memory (41.2%) posted large increases.
The rise in service prices was driven by higher brokerage commissions at securities firms (11.3%). The Bank of Korea (BOK) reflects brokerage commissions in the producer price index by multiplying stock index fluctuations by the commission rate at securities firms. The commission rate was similar to the previous month, but brokerage commissions increased as the KOSPI and KOSDAQ rose last month.
By contrast, prices for agricultural, forestry and fishery products fell 4.2% last month. Spinach (-45.7%) and pork (-14.2%) dropped sharply.
Meanwhile, the domestic supply price index for October, which measures price changes including imports, rose 0.9% from the previous month. Prices rose across materials and supplies (1.5%), intermediate goods (1.0%) and final goods (0.3%). The total output price index for October, which also includes exports, rose 1.1%.