PPI‚ which measures prices at the factory gates‚ was 6.6% year-on-year in May‚ unchanged from April's figure. Domestic output increased 0.5% month-on-month‚ mainly due to contributions from electricity and mining.
Analysts are basing their forecasts for easing PPI on softer commodity prices‚ among other factors.
Commodity prices fell on heightened eurozone uncertainty during the month.
ETM analytics chief economist George Glynos said ETM expected the "effects from commodity prices" to be a big driver of the PPI moderation going forward.
Chris Hart‚ economist at Investment Solutions‚ suggested the weaker rand might have led to the higher-than-expected PPI. The rand remains at weaker levels - mainly tracking the euro‚ which has lost ground against other major currencies due to ongoing sovereign debt in the eurozone.
"I think ultimately producer prices will come down because fuel and raw material prices are coming down‚ but higher maize prices could have an impact in the months to come‚" he said.
Petrol fell by 55 cents a litre in June‚ and more relief was expected for July on softer commodity prices‚ including oil‚ that prevailed during most of June.
The food component seems to be capping increases in producer prices‚ as figures suggest. On an annual basis‚ food at manufacturing decreased from 9.7% to 8.4% in May.
Absa Capital economist Ilke van Zyl said food prices at the agricultural and manufactured level usually pre-empted movements in the consumer price index's food component. "In this sense it is encouraging to see agricultural food prices slowing‚" she said.
An interest rate cut was unlikely at this stage. Economists suggested the main factor that would sway the Reserve Bank to cut rates would be a deterioration in the global economic activity‚ which would cause the domestic economy to slow more than expected.
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