Canada producer prices drop sharply for second month in a row

OTTAWA (Reuters) - Canadian producer prices fell by 0.7 percent in December, their second consecutive sharp month-on-month drop, thanks largely to cheaper energy and petroleum products, Statistics Canada said on Thursday.

Analysts in a Reuters poll had predicted a 0.2 percent increase in December after the 0.8 percent drop in November. The cumulative two-month decline was the greatest since June and July 2017, when prices dropped by 1.1 percent and 1.4 percent respectively.

Of the 21 major commodity groups tracked by the agency, 14 rose, three fell and four were unchanged.

Prices for energy and petroleum products fell by 7.4 percent, the greatest month-over-month drop since the 7.5 percent decline recorded in January 2016. Gasoline prices dropped by 7.4 percent.

Raw materials prices rose by 3.8 percent after four consecutive month decreases, pushed up by higher prices for crude energy products.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama)