INSTANT VIEW 3-Czech Aug industry PPI dips, farm prices jump

...growth to 3.7 percent from July's 4.2 
percent. 
**************************************************************** 
KEY POINTS: 
(change in percent)       Aug        July       Aug forecast 
 month/month             -0.1        0.2        0.2 
 year/year                3.7        4.1        4.1 
 
 (For full table of data...........................[nPRA001499]) 
 
- The statistics office says a 3.8 percent monthly drop in coke 
and crude oil refinery costs was the main driver of the dip. 
- Prices in the food processing industry rose 1.2 percent. 
- Separately, the statistical bureau said agriculture producer 
prices jumped 3.0 percent in August from July for a 15.6 percent 
year-on-year increase, up from a 11.3 percent gain a month ago. 
- Costs for construction work up 0.3 percent over the previous 
month, while prices for construction materials and goods edge up 
0.1 percent. 
  
COMMENTARY: 
    MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE: 
    "A drop in prices in the refining sector goods is behind the 
surprisingly low PPI. Any pleasure from the low result is, 
however, spoiled by the confirmation of the expected price 
growth in the food procesing sector and agriculture. 
    "Therefore I do not expect any significant positive market 
reaction." 
      
    JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH, 
KOMERCNI BANKA, PRAGUE: 
    "Producer prices recorded significantly lower-than-expected 
dynamics. However, the link with consumer prices is weak in the 
short-term. The statistics of agricultural producer prices are 
more important. 
    "Those rose significantly in August, which led to a marked 
acceleration in year-on-year growth. The August drop of food 
prices in August CPI was thus a one-off affair. Food threatens 
to remain an important inflationary factor." 
     
MARKET REACTION: 
    Czech crown unmoved by the data, trading at 27.480 to the 
euro  at 0733 GMT. 
     
BACKGROUND: 
- Industrial PPI and agriculture producer prices are watched 
closely by the markets as leading indicators for consumer 
inflation which is targeted by the Czech central bank (CNB). 
 
- August consumer inflation                      [ID:nL10319072] 
                                                 [ID:nPRA001491] 
- July industrial output figures                 [ID:nL10726236] 
- Report on last Czech c.bank rate decision      [ID:nL30781459] 
                  [ID:nPRA001485] [ID:nL07203646] [ID:nL3044281] 
 
LINKS: 
- For further details on August producer prices and past data, 
Reuters 3000 Xtra users can click on the statistical bureau's 
Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-ipc 
 
- For LIVE Czech economic data releases, click on        
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- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
  Keywords: CZECH ECONOMY/PRICES