Oil field oil workers at work
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With all eyes on inflation, Statistics Canada reported that raw material prices rose by  2.5% in September and industrial prices were up by 1.0% as energy prices jumped.

The national statistical agency reported that its Industrial Product Price Index (IPPI), which tracks the price of products manufactured in Canada, rose by 1.0% month over month, and was up by 14.9% compared with September 2020.

The increase in September followed a 0.3% decline for the previous month.

“The growth in the IPPI was mainly attributable to increases in prices for energy and petroleum products,” StatsCan said, noting that a 7.7% jump in diesel and biodiesel fuel prices largely drove the increase.

Fertilizer prices also jumped 10.7% and petrochemical prices rose 4.0% in the month.

“Limited supply of crude oil and natural gas, combined with temporary closures of some production sites in the United States after various storms passed through the Gulf of Mexico area, was largely behind” the rise in fertilizer and petrochemical prices, StatsCan noted.

Similarly, supply constraints and strong demand helped boost iron and steel prices, it said.

Higher energy prices also powered the surge in prices of raw materials purchased by Canadian manufacturers.

StatsCan reported that its Raw Materials Price Index (RMPI), which was up 2.5% month over month, was 31.9% higher compared with September 2020.

Crude energy products were the primary driver of the RMPI’s increase in September, StatsCan said, as prices for those products rose 7.2% in the month, after decreasing 5.8% in August.

“The oil market was driven upward by several factors, including increased global demand for oil, the ongoing production limits by the OPEC+ and the slow recovery of production on the U.S. Gulf Coast after Hurricane Ida moved through the area in late August,” StatsCan said.

Crop prices also jumped in September, with prices for grains (except wheat) surging 10.8%. This represented the sixth straight monthly gain, and was the highest increase since July 2012, StatsCan said.