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The Canadian Industrial Product Price Index (IPPI) rose 1.4 percent in February, led by higher prices for petroleum and coal products, according to Statistics Canada. The Raw Materials Price Index (RMPI) increased 2.2 percent as a result of higher prices for crude oil.
After remaining nearly unchanged in the last few months, the IPPI grew 1.4 percent in February, its largest advance since June 2008. Although petroleum and coal products were mainly responsible for the increase, all major commodity groups except meat, fish and dairy products were up.
The petroleum and coal products group (+6.6 percent) posted its largest gain since March 2011. Price increases were observed for most products, including gasoline (+8.3 percent) and diesel fuel (+5.6 percent). The increase in gasoline prices was partly attributable to reduced supply and higher world prices for crude oil. The IPPI excluding petroleum and coal products rose 0.6 percent in February.
Motor vehicles and other transportation equipment (+1 percent) also contributed to the advance of the IPPI in February, primarily as a result of higher prices for motor vehicles. The depreciation of the Canadian dollar against the U.S. dollar was largely responsible for this increase.
Some Canadian producers who export their products report their prices in U.S. dollars. Consequently, the 1.8 percent decrease in the value of the Canadian dollar relative to the U.S. dollar may have the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have risen 1 percent instead of 1.4 percent.
Among the other commodity groups that contributed to the upward movement was primary metal products (+1.3 percent), specifically aluminum products (+2.5 percent), copper and copper alloy products (+2.7 percent) and other non-ferrous metal products (+1 percent). Prices for primary metal products have been fluctuating on a monthly basis since November 2012.
In contrast, meat, fish and dairy products (-0.3 percent) declined because of lower prices for meat products. It was the only major commodity group that decreased in February.
Compared with February 2012, the IPPI increased 1 percent, after edging down 0.1 percent in January.
Compared with the same month a year earlier, the advance of the IPPI was largely a result of petroleum and coal products (+3.6 percent), specifically diesel fuel (+5 percent) and gasoline (+3.4 percent). The IPPI excluding petroleum and coal products was up 0.7 percent on a year-over-year basis.
With a 9.7 percent increase, lumber and other wood products also made a substantial contribution to the year-over-year increase of the IPPI. Higher prices for lumber and ties (+18.1 percent) were largely responsible for the increase. Prices for lumber and other wood products continued the upward trend observed since February 2012.
Motor vehicles and other transportation equipment posted a 1 percent year-over-year gain, mostly a result of the 1.3 percent depreciation in the Canadian dollar relative to the U.S. dollar. Without the measurable effect of the exchange rate, the IPPI would have risen 0.7 percent instead of 1 percent on a year-over-year basis.
Among the other commodity groups that posted increases was fruit, vegetables and feeds (+2.3 percent) and specifically feeds (+10.9 percent).
In contrast, the increase of the IPPI was moderated mainly by primary metal products (-3.8 percent). The largest year-over-year declines were in iron and steel products (-2.8 percent), aluminum products (-5.4 percent) and nickel products (-12.2 percent).
Raw Materials Price Index
The RMPI rose 2.2 percent in February, the second consecutive monthly advance. All major product groups were up, except for non-metallic minerals.
The increase of the index was mostly a result of mineral fuels (+3.3 percent), particularly crude petroleum (+3.5 percent). The RMPI excluding mineral fuels was up 1.3 percent in February.
Upward pressure was also exerted on the RMPI by non-ferrous metals (+2.7 percent), which increased mainly because of higher prices for copper concentrates (+3.8 percent) and zinc concentrates (+6.2 percent).
Compared with the same month one year earlier, the RMPI decreased 2 percent, continuing the downward trend that began in March 2012.
The decline of the RMPI was largely because of mineral fuels (-4.8 percent), specifically crude petroleum (-4.8 percent). The RMPI excluding mineral fuels increased 0.7 percent on a year-over-year basis.
Compared with February 2012, non-ferrous metals (-1 percent) were also down, primarily as a result of lower prices for radioactive concentrates (-15.8 percent) and precious metals (-6.3 percent).
The year-over-year decline of the RMPI was moderated slightly by vegetable products (+4.5 percent), wood products (+2.7 percent) and animals and animal products (+1 percent).