Korea’s Producer Prices Rise for Second Month as Farm Costs Climb

South Korea’s producer prices rose for a second consecutive month in September, driven by higher agricultural costs during the Chuseok holiday period, preliminary central bank data showed Wednesday.

The producer price index increased 0.2 percent from August, according to the Bank of Korea. That followed a 0.1 percent monthly gain in August and a decline in July, which had been the index’s first drop since August 2025.

Compared with the same month a year earlier, producer prices were 7.7 percent higher. The annual pace eased slightly from an increase of 7.9 percent in August, but remained elevated.

Agricultural, livestock and fisheries products recorded the largest monthly increase among the major groups, rising 2.6 percent. The central bank attributed the gain to stronger demand around Chuseok, which fell in the fourth week of September this year. Seasonal holiday demand can put upward pressure on food items as households and businesses increase purchases for gatherings, gifts and meals.

Utility-related costs also advanced. Prices for electricity, gas and water supplies rose 1.3 percent from the previous month. In contrast, prices for industrial goods, including petroleum and chemical products, were unchanged on a monthly basis.

The domestic supply price index, which combines the prices of domestically produced goods with imported goods supplied to the Korean market, was also unchanged from August. That flat reading suggests the month’s increase in the headline producer index was concentrated in particular categories rather than spread evenly across the supply chain.

Producer prices are watched as an early indicator of consumer inflation because changes in companies’ input and wholesale costs can eventually affect the prices paid by households. The degree and timing of that pass-through can vary depending on demand, inventories, exchange rates and whether businesses absorb higher costs in their profit margins.

The September data therefore present a mixed picture. The monthly headline index continued to rise and food-related producer costs strengthened during the holiday season, while the year-on-year rate moderated slightly and broad industrial goods prices did not increase from August. Future readings will show whether the agricultural rise was mainly seasonal or develops into more persistent pressure on consumer prices.