IPP
Iron ore pushes rise of industry prices after two consecutive decreases
September 25, 2019 09h00 AM | Last Updated: September 25, 2019 01h56 PM
The rise of prices of iron ore abroad and the appreciation of the dollar currency led to an increase of 0.92% in the overall industry inflation in August, versus figure recorded in July. That can be seen in the Producer Price Index, released today by the IBGE.
The index recorded two consecutive decreases: in June (-1.13%) and July (1.20%). In terms of the cumulative index in the year, the prices rose 2.48% and, in twelve months, 1.43%. The IPP measures the change in the prices of products at the "factory gate", without tax or freight, of 24 activities of the mining and manufacturing industries.
The indicator for the mining and quarrying sector recorded an increase of 7.67% in August, with a cumulative increase of 30.36% in the year and 31.44% in 12 months. These results led mining and quarrying industries to have the biggest influence on the general index.
Among the activities, the highlight was iron ore. “There was rise of prices abroad, besides a depreciation of the real against the dollar, of about 6.4%”, say the manager of the survey, Alexandre Brandão.
The second major contribution came from food products, the main highlights being soybeans, beef and milk. Soybean products, such as soybean meal and oil, and also cow milk had a bigger demand in the period. Regarding beef, the major influence came from exports, due to the currency change.
The dollar also influenced other activities, which changed from a decrease in July to an increase in August, such as means of transportation, mainly airplanes, which recorded a change from -1.04% to 3.65%, and commodities, such as tobacco (from -1.43% to 3.29%) and wood (from -1.17% to 0.93%).
“Currency exchange variation was not only most relevant in terms of products characterized by more competitiveness in the international market, for example, pulp and paper, which recorded an increase of 1.07% due to pressure from the Chinese market".
