On Producer Prices in August 2009

The falling domestic demand and the persisting weak foreign demand continue to affect not only the volumes of industrial production and sales but also producer prices.  Compared to the situation a year ago the producer price level in August was substantially lower, i.e. by 9.3%, moreover the drop was steeper in prices of exported production than in those of production sold domestically.

The drop in annual prices was largely affected by the persisting low metal and wood pulp prices determined by the situation in world markets as well as by the drop in food prices.

The monthly changes however point to a certain positive dynamics: the price levels remained unchanged due to the fact that prices of exports have been rising for a second consecutive month. This rise has been mostly determined by the production of wood pulp and its products, one of the few branches of industry, which has benefited from the diversification of markets, stabilizing and even somewhat increasing production, as well as by the printing industry and reproduction of records.

In view of the structure of the distribution of our products, the developments in producer prices will to a very large extent be determined by the situation in the world markets, whereas the weak domestic demand will continue dampening the prices of products sold domestically.