October: -0.2% m/m, +9.2% y/y

MNI survey median: +0.2% m/m, +9.4% y/y

September: +0.3% m/m, +9.9% y/y

FRANKFURT (MNI) – Import prices in Germany posted an unexpected
monthly decline in October as cheaper iron ore, raw iron and steel
offset costlier energy, the Federal Statistical Office reported Friday.

Import prices fell 0.2% on the month after +0.3% in September and
— chiefly due to energy, raw materials and metals — were 9.2% above
their level a year earlier.

Monthly price increases were led by energy, up 1.4% on the month
and 23.6% higher on the year. Excluding energy, import prices fell 0.5%
on the month and were 6.7% higher on the year.

Among other categories, capital goods prices fell 0.4% on the month
and were a mere 0.2% higher on the year.

Consumer goods’ import prices decreased 0.6% on the month and were
3.4% higher on the year. Within this category, imported durable goods
were 1.0% lower on the month and increased 1.7% on the year.
Non-durables were 0.4% cheaper on the month and were 4.0% dearer on the
year.

As one of the major components of the import price index, oil
prices will play a significant role in price developments going forward.

After reaching a recent peak of around $89 a barrel, Brent crude
prices retreated last week and are now trading under $85 a barrel.

The International Energy Agency argued this month that the global
outlook for 2011 does not justify sustained high prices next year.

With the dollar supported amid the Eurozone’s ongoing sovereign
debt crisis and tensions between North and South Korea, upward pressure
on oil prices should ease.

However, recent price gains in a number of soft commodities due to
adverse weather conditions earlier this year will continue to underpin
import prices.

Sugar prices jumped 3.1% late last week on concerns that supply
from India would be lower than initially forecast, while wheat prices
jumped 10% in Europe after Russia banned wheat exports this summer.
Prices for other foodstuffs, including soybeans, corn and coarse grains,
also saw notable increases.

With American regulators raising the proportion of ethanol required
in fuel, food prices may sustain further upward pressure in the near
term.

Export prices fell 0.3% in October and were 4.3% higher on the year
in October, the stats office also reported.

— Frankfurt Bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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