Beijing, Sep 9 (IANS): China's producer price deflation continued to ease in August amid a recovery in industrial activities and market demand, official data showed Wednesday.

The producer price index (PPI), which measures costs for goods at the factory gate, fell 2 per cent year on year in August, according to the National Bureau of Statistics (NBS), Xinhua news agency reported.

The reading narrowed from the 2.4-per cent drop in July.

Month on month, the PPI climbed 0.3 per cent in August, the NBS data showed.

NBS senior statistician Dong Lijuan attributed the rise to "continuously improving industrial production and recovering market demand."

"International prices of commodities such as crude oil, iron ores and nonferrous metals extended their upward momentum, leading to price increases for domestic industrial products," Lijuan said.

Producer prices in oil and natural gas extraction gained 3.6 per cent month on month, but the growth was milder than in July. Prices in the ferrous metal mining and dressing sector went up 4.3 per cent, while prices in nonferrous metal smelting and rolling rose 3 per cent.

In the January-August period, the PPI declined 2 per cent on average from a year earlier, according to the NBS data.

The PPI data came along with the release of the consumer price index, which showed consumer inflation easing to 2.4 per cent in August from 2.7 per cent in July.