September food costs

Colombian consumer prices

By Diana Delgado, OF DOW JONES NEWSWIRES

Tuesday, October 2, 2007

DATA SNAP: Colombia's Sep CPI +0.08% VS Consensus +0.15%
Consumer Price Index: (percentage increases, month-on-month)
Sep Aug Jul June May Sep/06
Forecast +0.15% +0.11% +0.06% +0.19% +0.37% +0.31%
Actual +0.08% -0.13% +0.17% +0.12% +0.30% +0.29%

BOGOTA (Dow Jones)--Colombian consumer prices rose lower than expected in September as food costs declined due to a higher supply of tubers and vegetables, the national statistics department, known as DANE, said late Monday. The statistics department said the consumer price index rose 0.08% in September, while a Dow Jones Newswires survey of nine economists had produced a median estimate of a 0.15% increase of the index.

Colombian consumer prices were up 5.01% in the 12-month period to September, down from 5.22% in the 12-month period to August, but still higher than the central bank's target range of 3.5% to 4.5%.

Food, which accounts for about a third of DANE's basket of goods and services, fell 0.01%, led by a 3.79% decline of tubers and plantains and a 0.31% decrease in vegetables prices, DANE said.

Sipsa, a government organization that collects agriculture price data, had said earlier last week the supply of potatoes increased in the center and south of the country in the first three weeks of September. In addition, the supply of vegetables and fruits rose in the same period.

Alvaro Camaro, head of research at the local unit of Stanford Group, said the inflation figure came as a surprise. Camaro was expecting a 0.16% increase in September.

Prices of culture and entertainment goods and services increased 0.13% in the month, while health costs gained 0.24%.

The sharpest increase in September's inflation reading came from the education sector, which advanced 0.49% as students returned from vacations.

To contain inflation, the Colombian Central Bank has gradually raised its benchmark interest to 9.25% from 6% in April last year.

The Central Bank also announced a measure forcing commercial banks to increase reserve requirements.

-By Diana Delgado, Dow Jones Newswires; 571-600-1980; diana.delgado@dowjones.com (Luis Enrique Hurtado contributed to this article)