OTTAWA – Canadian producer prices fell by 1.4 percent in June, the biggest decline in nearly two years, on lower prices for energy and petroleum goods, Statistics Canada data showed on Wednesday.
Analysts in a Reuters poll had predicted a decline of 0.1 percent in June following an initially reported boost of 0.1 percent in May due to higher prices for auto parts as well as energy and petroleum products. However, on Wednesday, Statistics Canada revised its May figure, reporting a decline of 0.1 percent.
Of the 21 major commodity groups tracked by the agency, 16 fell and five rose.
The appreciating Canadian dollar, Statscan said, also contributed to a decline in industrial prices. The loonie appreciated 1.3 percent to the U.S greenback from May to June. Motorized and recreational vehicles dropped by 0.6 percent in June – in part because of the stronger Canadian dollar.
Raw materials prices dropped by 5.9 percent, the second consecutive monthly decline, spurred by continued trade uncertainties, including Canada’s ongoing dispute with China.
Market uncertainty around global demand for fuel helped soften crude oil prices, which saw double-digit losses in June. The price of crude energy products dropped 11.6 percent, including a decline of 11.9 percent on conventional crude oil, Statscan said. Meanwhile, Canada’s continued trade spat with China is also having an effect, Statscan said, noting hog prices declined 5.6 percent in June after Chinese authorities blocked Canadian pork and beef exports.
Hog prices had surged 52.9 percent from February to May 2019 thanks to a global pork shortage due to a virulent outbreak of African swine fever in China. Cattle and calf prices also dropped in June, falling 1.3 percent.