The raw material Price Index (RMPI) is an economic indicator that determines the change in the cost of raw materials consumed by the industry.
This parameter is calculated on the basis of statistical data provided by national enterprises. This does not take into account the country of origin/supply of the material used in the production of products, as well as the impact of protectionist measures, if they are practiced by the state (subsidies, protective duties, etc.).
The main feature of calculating the raw material price index is that some countries include this parameter in the composition of producer prices, while others, on the contrary, tend to allocate changes to a separate indicator published in the economic calendar. The degree of influence of the output of economic news by RMPI depends on the occupied share of GDP income of the heavy, mining and processing industry, since the indicator points to the world trends price changes.
In a universal sense, its indications can be taken as leading, indirect reasons for the future growth of inflation. The strong growth of the RMPI index may predict stagnation of industrial growth and a decline in consumer demand.
Features of calculating the raw material price index
The peculiarity of calculating the price index by state statistics bodies depends on:
of futures on international exchanges multiplied by the volume consumed by industry
- Switching on or off the cost of electricity consumed
RMPI of Canada
The index of commodity prices in Canada for a day or two before the end of each month is published by the state statistics bodies at 15-30 Moscow time before the opening of the stock markets of this country. The calculation feature shows the inflation of the cost of raw materials for producers, expressed as a percentage change from the previous period.
Traders pay attention to the difference between the actual value and the analysts ' forecast, which is available before the statistics are released. Positive discrepancies can lead to a fall in the national currency, while negative expectations strengthen it.
In the long term, investors use these indicators only in combination with other economic data.
New Zealand Commodity Price Index
The commodity price index (ANZ) has a negligible impact on the exchange rate of the national currency, they make up 20% of the state's income. These are mainly agricultural and livestock products, coal and logging.
The statistics are collected and calculated by ANZ Bank New Zealand Limited, which publishes data on the commodity index at 4-00 Moscow time on the first week of each month.
Traders estimate the percentage change in export prices to the previous period and compare them with the forecast indicators that are available before the publication. A positive divergence or the observed upward dynamics strengthen the national currency, since such a trend increases GDP. Negative values and discrepancies may lead to a weakening of the NZD in the market Forex.
The index of raw materials prices in Australia
The Index of Commodity Prices is an indicator showing the relative change in prices for raw materials exported from Australia – wheat, wool, rice, sugar, aluminum, copper, gold, coal, etc. The statistics are tracked by the Reserve Bank of Australia, which takes into account the cost of real sales (upon sale), so the indicator determines the future value of GDP by 20%.
Traders have access to data on the relative change in export prices in the first days of each month, in the form of percentages. The obtained values are compared with the forecasts of analysts available before the publication.
Bloomberg Commodity Price Index (Dow Jones-UBS Commodity Index)
The news analytical agency Bloomberg suggested that countries replace part of the calculations of commodity price indices with a ready-made formula that tracked the price of futures of 22 types of raw materials in 7 sectors. In 1998, the index was acquired by the Dow Jones agency and renamed the Dow Jones-UBS Commodity Index, and in 2014 back to the Bloomberg Commodity Index.
The weights of the included raw materials were selected so that none of them was lower than 2% and higher than 15%, and similar groups did not exceed (collectively) 33% of the total 100% composition of the index.