UPDATE 1-Canada industrial prices drop for fourth month in a row

(Adds details)

* Industrial product prices down 0.1 percent * Raw materials prices up 3.4 percent

OTTAWA, Oct 1 (Reuters) - Canada's producer price index dropped for the fourth month in a row in August, slipping 0.1 percent from July on lower prices for motor vehicles and other transportation equipment, Statistics Canada said on Monday.

Market analysts had expected prices to remain unchanged. Without the effect of the Canadian dollar's 2.2 percent increase against the U.S. dollar in August, the price index would have risen 0.4 percent.

Of the 21 major commodity groups, 13 were down, four grew and four were unchanged. The motor vehicles and other transportation equipment group dropped 1.3 percent, largely due to the strengthening Canadian dollar.

Raw material prices increased 3.4 percent on the back of a 9.1 percent increase in the price of mineral fuel. Analysts had expected a more modest 1.5 percent rise.

Compared with August 2011, industrial product prices slid 0.3 percent compared with the 0.3 percent year-on-year advance recorded in July. Raw material prices dropped 4.0 percent from August 2011, compared with the 10.1 percent decline in July 2012 prices from July 2011.

(Reporting by David Ljunggren; Editing by Maureen Bavdek)

(([e-mail])([phone])(fax [phone])(Reuters Messaging: [e-mail]))

Keywords: CANADA ECONOMY/PRICES