POSTING LOSSES

Timber merchants not out of the woods yet - KNBS

Producer Price Index shows mixed results for manufacturing sector

In Summary
  • The highest producer price increase was in the manufacture of wood and cork except furniture at 6.47 per cent.
  • The overall producer prices decreased by 1.47 per cent from December 2019 to March 2020 while the year on year inflation was 1.07 per cent.
READY: Workers near a stack of wood in Dakatcha.
READY: Workers near a stack of wood in Dakatcha.

The timber industry incurred the highest production cost in the first quarter of 2020 as the sector continues to grapple with the low export market.

“The highest producer price increase was in the manufacture of wood and cork except for furniture at 6.47 per cent,” says the Kenya National Bureau of Statistics in its latest Producer Price Index.

According to the statistics body, the sector has been struggling as the export of wood products plunged 65 per cent in 2019. This can be attributed to the ban on logging in the country.

 

The country earned Sh225 million in 2019 from the industry a drop from Sh648 million in 2010.

The highest drop in producer price was in the manufacture of basic metals which was negative 5.36 per cent.

The manufacture of chemicals and chemical products and the manufacture of beverages recorded a price increase of 6.64 and 6.06 percent respectively.

The producer prices of a bale of maize flour, wheat flour and sugar declined by 4.9 per cent during the period under review, leading to a drop in prices for the products.

However, over the past 12 months, the price for producing a bale of maize flour has increased significantly by 43.5 per cent.

The producer price for a crate of fresh milk increased by 1. 1 per cent from Sh 784 in December 2019 to Sh 793 in March 2020.

 

Overall, producer prices decreased by 1.47 per cent from December 2019 to March 2020 while the year on year inflation was 1.07 per cent. The PPI decreased from 102.58 points in December 2019 to 101.07 points in March 2020.

The PPI has been produced since 2012 with the weights derived from the Census of Industrial Production(CIP).

The price changes are measured from the perspective of the producer.

The 2020 first-quarter results reflect a newly rebased PPI introduced by the Central Bank of Kenya to reflect changed production patterns and a new industrial structure.

“Over time, the production patterns and the industrial structure has changed necessitating the need to rebase the index to reflect the current status,” said KNBS Director-General Zachary Mwangi.