Drop in agricultural producer price index

A substantial drop in the prices of fresh vegetables and animal slaughterings has led to an 8.8 per cent decline in the producer price index for agriculture in June compared to the same month last year.

The index dropped by 8.9 points to 91.53 from 100.41 in June 2002.

The potatoes index and other animal products index fell slightly, by 2.2 per cent and 4.3 per cent respectively.

On the other hand, the fresh fruit index increased substantially by 31.8 per cent or 31.2 points from 98.11 points in June 2002 to 129.30 points in June 2003.

The drop in the fresh vegetables index when comparing last June to June, 2002 was a result of the higher quantity of fresh vegetables passing through organised markets, which subsequently led to a reduction in prices of the main vegetable products.

On the other hand, the fresh fruit prices, on average, rose due to a decline in the marketed quantity of fresh fruit. This, in turn, pushed up prices of the main quantities of fresh fruit, such as peaches (24.5 per cent) and lemons (111.8 per cent).

The drop in the producer price index for animals fell from 102.16 points in June 2002 to 89.62 points last June.

The decline in the index was due to a drop in the prices of pork (-18.3 per cent) and poultry meat (-10.2 per cent) following the Special Market Policy programme for Maltese Agriculture that started operating in July 2002.

The other animal products index fell due to a decline in the price of eggs (-19.0 per cent), while the price obtained by farmers for milk went up marginally by three per cent.

When comparing June to May, the producer price index for agriculture fell by 45.6 points or 33.2 per cent from 137.12 points in May to 91.53 points in June. The substantial decrease in the index was due to decreases in the prices of potatoes (-40.5 per cent), fresh vegetables (-63.6 per cent), and fresh fruit (-6.6 per cent).

Fresh vegetable prices declined mainly due to drops in the prices of tomatoes (-55 per cent), sugar melons (-90.8 per cent), and water melons (-74.4 per cent), while the fresh fruit index declined mainly due to declines in the prices of most of the fresh fruit.

The input price index for agricultural products in June stood at 100.63. Unlike the producer price index, the input price index is unaffected by seasonal patterns of certain products.

The input price index does not fluctuate that much due to the fact that the main input of agriculture is animal feeding stuffs which are controlled by a government price order.

When compared to the month of June, 2002, the index fell by one point or one per cent.

A marginal increase was also registered when comparing the input price index of June 2003 to May 2003. The increase registered was 0.6 points or 0.6 per cent.

The increase was due to increases in the goods and services consumed in agriculture index from 100.10 points in May to 100.74 points in June. The machinery and investment index remained stable at 93.4 points for the months of May and June.