South Korea’s producer prices grew at the slowest pace in nine months in September as prices of agricultural products fell, the central bank said Tuesday.

The producer price index, a barometer of future consumer inflation, rose 5.7 percent in September from a year earlier, slowing from a 6.6 percent on-year gain in August, according to the Bank of Korea.

The September reading marked the slowest expansion since a 5.3 percent on-year expansion tallied in December 2010, it added.

Compared with a month earlier, the growth of the producer prices slowed down to 0.1 percent in September, down from 0.3 percent in August as prices of vegetable and fishery products declined.

“Whether the producer prices slow down will hinge on the movement of the local currency and oil prices,” said Lee Byung-doo, an official at the BOK.

The costs of agricultural and fishery goods fell 7.1 percent in September from the previous year, a turnaround from a 12.5 percent expansion tallied in August. The prices of such goods fell 4.2 percent on-month in September.

In September, the local currency fell 3.2 percent to the dollar compared with a year earlier. The Korean unit slid 9.44 percent to the greenback compared with August.

The data came two days before BOK policymakers are scheduled to hold their monthly rate-setting meeting. The central bank is widely expected to freeze the key interest rate at 3.25 percent for the fourth straight month on dimmer global economic outlooks.

Inflationary pressure slightly eased in September. South Korea’s consumer prices grew 4.3 percent in September from a year earlier, slowing from 5.3 percent in August, but they surpassed the upper limit of the BOK’s 2-4 percent inflation target band for the ninth straight month. 

(Yonhap News)