The European Union's statistics office Eurostat said prices at factory gates in the 20 countries sharing the euro fell 3.2% in April from March and were 1.0% higher year-on-year.
Economists polled by Reuters had expected a monthly fall of 3.1% and a 1.4% year-on-year rise.
Producer prices are an early indication of trends in consumer inflation, which the ECB wants to keep at 2.0% over the medium term, but which stood at 6.1% in May.
The ECB has raised its deposit rate by a combined 375 basis points to 3.25% over the past year and has essentially committed to another 25 basis point hike on June 15. Declining inflation has fuelled a debate about the need for rate increases beyond then.
Eurostat said the monthly fall in producer prices in April was due to a 10.1% drop in energy costs and a 0.6% easing in prices of intermediate goods.
Lower energy prices also held the year-on-year reading down. Without energy, producer prices were 5.1% higher than a year earlier, mainly because of a 10.9% increase in non-durable consumer products, such as food.
Durable consumer goods were also 7.3% higher and capital goods 6.1% up year-on-year.
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(Reporting by Philip Blenkinsop, Editing by Charlotte Van Campenhout)
