Industrial product and raw materials price indexes, November 2021

Released: 2022-01-04

The price of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), increased 0.8% month over month in November and 18.1% compared with the same period in 2020. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), fell 1.0% month over month in November, and were up 36.2% year over year.

Chart 1 
Prices for industrial products increase

Industrial Product Price Index

In November, the IPPI was up by 0.8% on a monthly basis, and 18.1% year over year.

Prices for ammonia and chemical fertilizers rose 10.5% compared with October 2021, a seventh consecutive monthly increase. This put prices 132.7% higher than November 2020, making it the largest year-over-year increase on record for ammonia and chemical fertilizers. Globally, prices for fertilizer have been pushed up by a multitude of factors. Higher prices for inputs used in fertilizer production, including natural gas and coal, are playing a part. Fertilizer exports have been restricted in China, where production was recently affected by a shortage of coal. Russia has also placed quotas on exports of fertilizer, a move that was signalled in November and took effect as of December 2021. In 2019, China and Russia were the top two exporters of fertilizer, accounting for 24.7% of global exports.

Many intermediate food products showed price gains in November. Prices for flour and other grain mill products were up 2.3% on a monthly basis, and were 40.9% higher than November 2020. The grain and oilseed products, n.e.c. category rose 7.3% month over month, and 26.8% year over year. This category includes canola oil, as well as soybean oil and soybean meal. Canola oil prices have been trending upward due to tight canola supply in Canada. Soybean meal prices spiked in November in part due to a shortage of dry lysine, an additive for animal feed. Soybean meal can be substituted in its place.

From October to November, the Canadian dollar depreciated by 1.1% on average against the US greenback. This increases the nominal prices of goods priced in US dollars. Prices for motorized and recreational vehicles rose by 0.6% in November, mostly attributable to this depreciation. If the exchange rate was held constant during calculations, this commodity group would have risen by 0.3%, and the overall IPPI would have gained 0.4% instead of 0.7%.

Prices for energy and petroleum products fell 0.7% month over month, coinciding with a drop in prices for crude oil. Diesel and biodiesel fuels (-3.0%), and motor gasoline (-1.0%) both posted lower prices in November. Crude prices fell sharply in late November due to demand concerns associated with the Omicron COVID-19 variant.

Prices for the unwrought gold, silver, and platinum metals group rose 3.9% on a monthly basis in November, following five consecutive months of decline. The increase may be in part attributable to hedging against inflation and its effect on the real rate of return.

The price of unwrought aluminum and aluminum alloys fell 8.5% from October to November. This followed six consecutive months of increases. The decline was partly attributable to China ramping up imports of coal, the main energy source for their aluminum industry.

Factory gate prices of key meat products were mixed in November. The price of fresh and frozen pork was down 9.1% on a monthly basis and down 7.5% year over year. This coincided with a 10.5% monthly decline for hogs. Canadian stocks of frozen and chilled pork in cold storage were up 3.7% year over year at the beginning of the fourth quarter of 2021; this was 13.1% higher than the level at the beginning of the third quarter. China's pork imports were down 50.1% year over year in November, as domestic production increased and the population of hogs recovered from the impact of African swine fever.

Prices for fresh and frozen beef and veal were up 4.6% on a monthly basis and 22.9% higher than in November 2020. This coincided with a 2.3% monthly gain in the price of cattle, putting it 15.9% higher year over year. Stocks of frozen and chilled beef in cold storage were down 5.8% on a monthly basis at the beginning of the fourth quarter of 2021, and were 4.2% lower than the beginning of the third quarter. Strong seasonal demand going into the holiday period also played a role in the price increase.

Raw Materials Price Index

The RMPI fell by 1.0% month over month in November, and was up 36.2% year over year.

Prices for crude energy products fell by 4.4% on a monthly basis. Excluding crude energy products, the RMPI was up by 1.2% month over month.

In November, prices for coal fell 32.8% as China augmented its production in response to tight supply and high prices. Year over year, coal prices were up 135.3%. The price of natural gas was down 4.5% from October to November, partly due to higher than expected temperatures in the United States. Conventional crude oil prices fell 2.7%, as demand concerns due to the Omicron COVID-19 variant reduced optimism.

Many crop products posted higher monthly prices, including canola (+8.7%) and wheat (+8.5%). The increases continue a trend brought on by limited supply. Recent field crop estimates show that Canadian production of canola fell by 35.4% in 2021, while wheat production fell by 38.5%.

Prices for iron ores and concentrates fell 20.4%, as limited steel production in China kept demand low.

Prices for hogs (-10.5%) fell in November, coinciding with ample cold storage of pork in Canada going into the fourth quarter, and increased production in China. Conversely, cattle posted a 2.3% monthly gain, in part due to strong seasonal demand, and lower stocks of frozen beef going into the fourth quarter.

Chart 2 
Prices for raw materials fall

Contact information

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