South Korea Sept producer inflation up but stays low

SEOUL, Oct 11 (Reuters) - South Korean annual producer priceinflation quickened for a second consecutive month in Septemberbut remained subdued due to the economic slump, data showed onThursday, hours before the central bank's policy meeting.

The producer price index (PPI) rose 1.0 percent in Septemberfrom a year earlier as bad weather hit supplies of farmproducts, accelerating from a 0.3 percent gain in August and a0.1 percent drop in July, central bank data showed.

The pace of increase also marked the fastest since May thisyear but came far below the average of 6.1 percent seen in 2011or the central bank's consumer inflation target of 3 percent.

The Bank of Korea is widely expected to cut the policyinterest rate

at a meeting due later in the day asAsia's fourth-largest economy slowed while inflation remainedlow, a Reuters survey showed.

Its monetary policy committee starts the meeting at 9 am(0000 GMT) and usually announces its decision at around 10 am.

On a month-to-month basis, the index rose 0.7 percent inSeptember after an increase of the same 0.7 percent in August,the Bank of Korea data showed.

Producer prices of vegetables shot up 30.2 percent inSeptember from a year earlier, compared to a 3.4 percent fallrecorded in August, while fruit prices jumped 30.5 percent lastmonth from a year earlier, the data showed.

Percentage changes in South Korea's producer price index,released by the Bank of Korea (not seasonally adjusted):

SEPT AUG SEPT AUG(MTH/MTH) (YR/YR)PPI 0.7 0.7 1.0 0.3MAJOR CATEGORIES:Agricultural, fisheries, 5.9 5.5 7.4 -2.9forestry productsIndustrial goods 0.7 0.6 0.0 -0.2Electricity, tap water, gas -0.1 2.7 7.5 7.8Services 0.0 0.1 1.3 1.0

NOTE: Industrial goods, which include petrochemicals,textiles and electronics, have a 64.48 percent weighting in theoverall index, compared with 26.44 percent for service chargesand 4.36 percent for farm and fisheries products.

(Reporting by Christine Kim; Editing by Choonsik Yoo)

((christine.kim@thomsonreuters.com)(822 3704 5665)(ReutersMessaging: christine.kim.thomsonreuters.com@reuters.net))