IPP
Prices in industry shrink 1.14% in June after four months of increase
July 31, 2019 09h00 AM | Last Updated: July 31, 2019 10h27 AM
Influenced by the appreciation of the real against the dollar in June, industry prices deflated by 1.14% compared to May, when it rose by 1.39%. It is the first drop after four positive rates in a row since February. The main negative impacts came from petroleum and biofuel products and from the food sector.
The information is provided by the Producer Price Index (IPP), a survey released today by the IBGE. It measures the change in product prices at "factory gate", free of tax and freight, of 24 mining and quarrying and manufacturing activities.
“In the case of petroleum, prices are falling internationally. In addition, in June we had an appreciation of the real [against the dollar], which had an impact on the fall in domestic prices. Thus, in the case of petroleum, as well as all its derivatives, prices are falling internationally due to the exchange rate effect ”, explains IPP manager Alexandre Brandão.
Regarding food, the negative highlights were beef and milk, while residues of soybean extraction had a positive impact.
“In the past months, we were exporting a lot of meat, due to China's increased imports. But in June there was a circumstantial exporting problem with those meats. So we had a bigger supply in the domestic market and prices fell,” says Brandão.
The drop in milk prices was the result of a lower demand for the product in the domestic market, which led to an increase in the inventories and a consequent decrease in prices. The increase in the price of residues of soybean extraction is related to problems in the soybean crops in the United States, which led to an increase in the price of soybean in the international market.
Only eight of the 24 industrial activities investigated had positive price changes compared to May.
