Prices at SA's factory gates lift slightly in June

Final manufactured goods prices for June 2020 increased 0.5% compared to the previous year, according to the latest Stats SA data.

The annual change in May was 0.4%.

Month-on-month, the change in factory gate prices was 0.5% between June and May.

Investec economist Lara Hodes noted that the print was attributable to smaller negative contributions from coke, petroleum, chemical, rubber and plastic products – which hold the second largest weighting in the producer inflation basket.

 "Specifically, this grouping in which fuel price dynamics are captured, detracted -2.0% from the topline PPI reading in June compared to -2.3 % in May."

In June the petrol price was increased by R1.18/l, which slowed the rate of petrol price deflation, Hodes said. 

Potential fuel price increases for July are expected to push up July's producer inflation.

Manufactured food price inflation for June of 3.8%, slightly lower than that the 4.2% recorded in May.

This was mainly due to the decrease in prices of fruit and vegetables and dairy products. "We expect food price inflation to remain well contained in the near-term," she added.