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Canadian Industrial Product Price Index Up 0.4% in March

The Canadian Industrial Product Price Index rose 0.4 percent in March, mainly because of higher prices for meat, fish and dairy products. The Raw Materials Price Index increased 0.6 percent, led by animals and animal products.

IPPI Monthly Change
The IPPI grew 0.4 percent in March, after rising 1.2 percent in February. It was the fifth consecutive monthly increase. Of the 21 major commodity groups, 17 were up, two were down, and two were unchanged.

The growth of the IPPI was mainly attributable to higher prices for meat, fish and dairy products (up 3 percent). Fresh and frozen pork (up 14.6 percent) was the main reason for the increase in this commodity group. This was the largest gain for fresh and frozen pork since May 2008, primarily because of higher prices for hogs.

Chemicals and chemical products (down 1.1 percent) declined for the first time since October, led by lower prices for petrochemicals (down 8.6 percent). Prices for ammonia and chemical fertilizers were up 6.7 percent, moderating the decline for chemicals and chemical products.

Fruit, vegetables, feed and other food products (up 0.9 percent) also contributed to the increase in the IPPI, pushed upward by higher prices for intermediate food products (up 3.2 percent) and other animal feed (up 0.6 percent). This was the largest increase for the fruit, vegetables, feed and other food products group since August 2012.

To a lesser extent, primary non-ferrous metal products (up 0.9 percent) and motorized and recreational vehicles (up 0.4 percent) also exerted upward pressure on the IPPI.

Higher prices for unwrought precious metals and precious metal alloys (up 2.6 percent) and lower prices for unwrought copper and copper alloys (down 6.2 percent) offset the increase in primary non-ferrous metal products.

The gain in motorized and recreational vehicles product group (up 0.4 percent) was led by higher prices for passenger cars and light trucks (up 0.4 percent) as well as aircraft (up 0.9 percent). The advance of the motorized and recreational vehicles index was closely linked to the depreciation of the Canadian dollar relative to the US dollar.

Some Canadian producers who export their products report their prices in US dollars. Consequently, the 0.5 percent decrease in the value of the Canadian dollar relative to the US dollar may have had the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have risen 0.2 percent instead of 0.4 percent.

IPPI 12-Month Change
The IPPI increased 2.7 percent during the 12-month period ending in March, after rising 2.1 percent in February.

Compared with March 2013, the growth of the IPPI was mainly attributable to energy and petroleum products (up 5.1 percent), specifically diesel fuel (up 9.6 percent), light fuel oils (up 9.6 percent) and motor gasoline (up 3 percent). The IPPI excluding energy and petroleum products rose 2.2 percent on a year-over-year basis.

Motorized and recreational vehicles (up 4.9 percent) also contributed to the year-over-year increase in the IPPI, as a result of higher prices for passenger cars and light trucks (up 5.8 percent) and aircraft (up 10.1 percent). On a year-over-year basis, prices for motorized and recreational vehicles have been on an upward trend since July.

Compared with March 2013, meat, fish and dairy products rose 7.3 percent, mainly because of higher prices for fresh and frozen pork (up 42.5 percent).

To a lesser extent, chemical and chemical products (up 5.6 percent) also contributed to the year-over-year increase in the IPPI, mostly as a result of higher prices for petrochemicals (up 7.5 percent), ammonia and chemical fertilizers (up 13.6 percent) as well as plastic resins (up 9.1 percent).

The growth of the IPPI over the 12-month period was moderated mainly by lower prices for primary non-ferrous metal products (down 5 percent), specifically unwrought precious metals and precious metal alloys (down 12.2 percent). On a year-over-year basis, primary non-ferrous metal products have been declining since December 2011.

RMPI Monthly Change
The RMPI rose 0.6 percent in March, after advancing 5.7 percent in February. It was the fourth consecutive monthly increase. Of the six major commodity groups, three were up, two were down and one was unchanged.

The advance of the RMPI was largely attributable to animals and animal products (up 5.8 percent), which have been rising since January. Live animals (up 10.1 percent), particularly hogs (up 24.3 percent), were responsible for the increase in the animals and animal products group. The rise of hog prices in March was partly due to the porcine epidemic diarrhea virus.

To a lesser extent, crop products (up 4.5 percent) also contributed to the advance of the RMPI, posting the largest gain since July 2012. The increase in this commodity group was led by other crop products (up 3.8 percent), wheat (up 10.2 percent) and canola (up 11.7 percent).

Conversely, the growth of the RMPI was moderated primarily by crude energy products (down 0.9 percent), which were down for the first time since November. Lower prices for conventional crude oil (down 1.1 percent) were largely responsible for the decline in this commodity group. The RMPI excluding crude energy products rose 2.2 percent in March.

The increase in the RMPI was also moderated by metal ores, concentrates and scrap (down 1.4 percent), which posted the largest decline since July.

RMPI 12-Month Change
The RMPI increased 6.1 percent in the 12-month period ending in March, after rising 3.9 percent in February.

Compared with March 2013, the advance of the RMPI was mainly a result of higher prices for crude energy products (up 12.5 percent), primarily conventional crude oil (up 12.3 percent). On a year-over-year basis, the RMPI excluding crude energy products was down 0.6 percent.

To a more modest extent, animals and animal products (up 13.4 percent) also exerted upward pressure on the RMPI, as a result of higher prices for live animals (up 24.5 percent), particularly hogs (up 49.8 percent).

Compared with the same month a year earlier, the increase in the RMPI was moderated largely by prices for metal ores, concentrates and scrap (down 9.6 percent), which have been declining since January 2013.

The growth of the RMPI over the 12-month period was also moderated by crop products (down 6.5 percent), which posted a ninth consecutive year-over-year decline. Other crop products, particularly grains (except wheat), as well as canola were largely responsible for the decrease in this commodity group.

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