In July 2019, the Producer Price Index (IPP) had decrease (-1.24%) in relation to June. The cumulatine index in th year was of 1.50% and of the 12 months, of 1.33%. Five of the 24 industrial activities surveyed were on the rise.

In July/2019, in relation to the previous month, five of the 24 activities showed positive price changes, compared to eight from the previous month.

The four largest changes observed in July/2019 were in the following industrial activities: basic metals (-3.74%), petroleum refining and ethanol products (-2.67%), other chemicals (-2.20%) and food (-1.81%).

The most intense influences on the July IPP (-1.24%), in the same comparison, were food products (-0.40 pp), petroleum refining and ethanol products (-0.27 pp), basic metals (- 0.23 pp) and other chemicals (-0.18 pp).

In July/2019, the cumulative index in the year (July/2019 against December/2018) reached 1.50%, against 2.78% in June/2019. The activities with the highest percentage changes were: mining and quarrying (21.07%), petroleum refining and ethanol products (8.26%), pharmaceuticals (7.93%) and pulp and paper (-6.84%).

The most influential sectors were mining and quarrying (0.88 pp), petroleum refining and ethanol products (0.77 pp), other chemicals (-0.41 pp) and pharmaceuticals (0.24 pp).

Compared to the same month of 2018, prices rose 1.33% in July, after rising 3.76% in June/2019, in the same comparison. The four largest price changes occurred in mining and quarrying (24.04%), pharmaceuticals (10.74%), machinery and equipment (8.18%) and pulp and paper (-7.14%).

Among the Major Economic Categories, the -1.24% change over June was distributed as follows: 0.15% in capital goods; -1.79% in intermediate goods; and -0.72% in consumer goods, with 0.06% for durable consumer goods and -0.89% for semi-durable and non-durable consumer goods.

The influences of the Major Economic Categories were: 0.01 pp of capital goods, -0.98 pp of intermediate goods and -0.28 pp of consumer goods. In the case of consumer goods, -0.28 pp was due to price changes observed in semi-durable and non-durable consumer goods and 0.00 pp in durable consumer goods.

The cumulative changes in the year between the Major Categories were: the 2.92% change of capital goods (with influence of 0.22 pp), 0.74% of intermediate goods (0.40 pp) and 2.32% of consumer goods (0.88 pp). In the latter case, this result was influenced by 0.19 pp by durable consumer goods and 0.69 pp by semi-durable and non-durable consumer goods.

Compared to July 2018, industry prices rose 1.33%, with the following changes: capital goods, 6.28%; intermediate goods, -0.12%; and consumer goods, 2.51%.

Next, the six sectors that, in July 2019, were among the main highlights are analyzed in more details.

Mining and quarrying industries: In July, there was a fall in prices (-1.27%), compared to the previous month. The cumulative change in the year was 21.07%. In comparison with July 2018, prices changed 24.04%.

In terms of influence, the highlight was the cumulative indicator in the sector year over the general industry indicator (0.88 pp in 1.50%).

Regarding the products surveyed in the sector, the highlights were the changes in the prices of iron ores and “crude petroleum oils”.

Food products: In July 2019, the average price change in the sector compared to the previous month was -1.81%. This was the fourth lowest rate in the series, with -2.58% (February 2013), -2.23% (January 2017) and -2.08% (July 2017) being the most negative rates.

January and February are low months in the sector, due to the soybean harvest and the cattle slaughtering. In July 2017 and 2019, the Real currency increased by 2.7% and 2.1%, respectively.

In the year, the sector accumulated a fall of -0.51%, returning to the negative level of March 2019 (-0.96%). In relation to the same month of 2018, the rate of -0.93% is the first negative one since April 2018 (-0.67%).

The highlight given to the sector was due to the fact that, besides being the sector that contributes most in the calculation of the index (23.17%), it was the fourth largest change (in module) among all activities that make up the total of mining and quarrying and manufacturing industries and the first influence in the comparison July 2019/June 2019 (-0.40 pp, -1.24%).

Compared to June, the four most prominent products in terms of influence accounted for -1.17 pp of the -1.81% change. Two of them (“crystal sugar” and “soy extraction residues”) also featured prominently in terms of change. Other highlights highlighted in terms of influence were “frozen poultry meat and offal” and “very high polarization (VHP) sugar”. In line with the appreciation of the Real, the prices of the four products (export profile) fell.

Petroleum refining and alcohol products: On average, industry prices from June to July contracted by 2.67% - the second negative change. With that result, the cumulative change from May to July reached -9.72 %. With the change in July, the cumulative in the year, which once was 19.91% in May, reached 8.26%. Finally, compared to July 2018, there was a fall of -0.58%, the first negative result since July 2017, -0.78%.

In addition to having made the second largest contribution to the index (10.45%), the sector stood out as the second largest change in relation to the previous month and year to date; morover, it recorded the second largest influence on the monthly change (-0.27 pp, -1.24%) and on the cumulative rate (0.77 pp, 1.50%).

The biggest influences on July's result against June (-2.66 pp in -2.67%) came from petroleum products, whose prices fell, in line with crude oil.

Other chemicals: Compared to June, prices in the sector fell (-2.20%), which had not occurred since February this year (-1.89%). Despite the positive changes between March and June, the cumulative index in the year remained negative (-4.68%). The cumulative index in 12 months was negative (-5.77%) for the first time since July 2017 (-0.16%).

The sector made the fourth largest contribution (8.60%) to the index of the month, for the following reasons: it was the third largest price change, in module; the fourth influence in comparison with June (-0.18 pp, -1.24%); and the third in the cumulative (-0.41 pp, at 1.50%, the only negative among the four highlighted sectors).

Pharmaceuticals: fall of -1.30% compared to June, reversing the series of increases that began in February this year. It was the sharpest fall since April/2018 (-1.48%). Among the general industry sectors, this segment had the third largest year-to-date price change (7.93%) and the second largest in the last 12 months (10.74%).

Despite the fall (-1.30%), some increases in 2019 were the largest in the pharmaceutical industry's time series. Year-to-date (7.93%) was the highest for a month of July since the beginning of the series. In the last 12 months (10.74%), it was the second largest in the series, just behind  June index (11.26%). The sector is among the most influential in the year, being the fourth most important in July.

The four products with the greatest influence in the month contributed -1.17 pp to the -1.30% change, and the other eight products, with -0.13 pp. Two of them were also among the most influential in comparison with June, in the Non-Durable Consumer Goods category. They are: “hormone-based medicines for human use, except contraceptives” and “nitrogen-exclusive heterocyclics or proton-pump inhibitors (eg omeprazole)”.

Basic metals: fall of -3.74% against June, the first since February this year and the largest in the whole time series. This result is mainly due to products whose prices depend on the international market and on the exchange rate, in a month in which the Real appreciated 2.1% against the US Dollar. They are: "pig iron", "ingots, blocks, billets or plates of carbon steel", "aluminum plates and strip, of a thickness exceeding 0,2 mm" and "aluminum oxide (calcined alumina)", all with negative influence on the index of the month. Taken together, these four products accounted for -3.35 pp, and the remaining 20 products, for -0.39 pp.

The sector accumulated a fall of -2.21% in the year, distant from the cumulative index in July 2018 (13.49%). The cumulative result in 12 months also decreased (-2.19%), interrupting a sequence of 32 positive changes that started in November 2016.

Of the four products with the highest influence in the year, two of them also exerted a negative impact on the index: “ingots, blocks, billets or plates of carbon steel” and “aluminum oxide (calcined alumina)”. Conversely, the products "aluminum sheets and strips, thickness greater than 0.2mm" and "gold for non-monetary uses" had a positive impact on the cumulative indicator in the year.