In July 2020, industry prices rose 3.22% compared to June 2020, the largest positive change in the series, which started in January 2014

The cumulative index in the year reached 7.28%. In comparison with July 2019, the price change was 11.13%. In July, 21 of the 24 activities showed positive price changes, against 10 in the previous month.

The Producer Price Index (IPP) for Mining and Quarrying and Manufacturing Industries measures the evolution of "factory gate" prices, excluding taxes and freight, and covers information by major economic categories, that is, capital goods, intermediate goods and consumer goods (durable, semi-durable and non-durable). The full IPP publication can be accessed here.

In July 2020, the prices in industry changed, on average, 3.22% in relation to June 2020. The four major changes were the following industrial activities: mining and quarrying (14.46%), petroleum refining and ethanol products (11.65%), tobacco (4.69%) and toiletries, soaps and cleaning products (3.77%). The sectors with major influence were: food (0.90 pp), petroleum refining and ethanol products (0.89 pp), mining and quarrying (0.68 pp) and basic metals (0.14 pp).

The cumulative of the year achieved 7.28%, against 3.93% in June 2020. The activities which recorded biggest changes were: mining and quarrying (24.42%), other transportation equipment (18.58%), wood (17.30%) and basic metals (16.92%). In the cumulative of the year, the sectors with major influence were: food (2.83 pp), petroleum refining and ethanol products (-1.77 pp), mining and quarrying (1.10 pp) and basic metals (0.98 pp).

In the cumulative over 12 months, the price change was 11.13%, against 6.38% in June 2020. The four major changes were other transportation equipment (26.19%), food (23.78%), wood (19.21%), and computer equipment, electronic and optical products (17.75%). The sectors with major influence were: food (5.24 pp), basic metals (1.05 pp), mining and quarrying (0.83 pp) and petroleum refining and other ethanol products (-0.72 pp).

The price change of 3.22% in relation to June was distributed as follows among the Major Economic Categories: capital goods (1.34%), intermediate goods (4.19%), consumer goods (2.25%), with 0.97% in durable goods and 2.52% in semi-durable and non-durable goods.

From the overall industry result, 3.22%, the influence of the Major Economic Categories were: capital goods (0.11 pp), intermediate goods (2.26 pp) and consumer goods (0.86 pp). Regarding consumer goods, 0.06 pp was from semi-durable and non-durable goods and 0.79 from durable goods

In the cumulative of the year, the price changes in industry accumulated changes of 7.28% until July, with 10.85% from capital goods (0.81 pp of influence), 9.29% from intermediate goods (4.97 pp) and 3.85% from consumer goods (1.51 pp). The last one was influenced at 0.39 pp by durable goods and 1.12 pp by semi-durable and non-durable goods.

In the comparison between July 2020 and July 2019, the price change in industry achieved 11.13%, with the following changes: capital goods (14.16% and 1.07 pp), intermediate goods (11.61% and 6.29 pp) and consumer goods (9.86% amd 3.77 pp), with the influence of 0.50 pp from durable goods and 3.27 pp from semi-durable and non-durable goods.

See the highlights below:

Mining and quarrying: in the comparison with June, the prices in July changed on average 14.46%, the fourth consecutive increase, in a higher level than the previous months, 5.64% on average for the three months. With this increase, the cumulative of the year was 24.42%, the highest result among all months of July in the series (the first index number in this serie is December 2013, thus, the first July in this series is of 2014). Finally, in the comparison with the same month of 2019, the change was 16.73%.

The sector is a highlight due to the highest changes in the comparison July/June and in the cumulative of the year. Furthemore, in terms of influence, the sector is the third on the three surveyed indicators: in relation to the previous month (0.68 pp, in 3.22%), to the cumulative of the year (1.10 pp, in 7.28%) and to the cumulative of the 12 months (0.83 pp, in 11.13%).

Food products: in relation to June, the food prices have changed on average 3.69% -  the highest growth since March (4.23%). As a result, until July, the cumulative change of the year was 12.03%, the second highest rate in the month series, only behind July 2012 (12.09%). And finally, in the comparison with July 2019, the latest prices were 23.78% higher.

The highlight given to the sector was the second biggest price change, in the cumulative of 12 months and, in terms of influence, was the first in the three surveyed indicators: in relation to the previous month (0.90 pp, in 3.22% of the change of the mining and quarrying and manufacturing industry), to the cumulative of the year (2.83 pp, in 7.28%) and to the cumulative of 12 months (5.24 pp, in 11.13%).

The four products with major influence in the result of July against June (2.21 pp, in 3.69%), were: “VHP (very high polarization) sugar”, “frozen poultry meat or giblets” and “crude soybean oil, whether or not degummed”. Of those products, only “VHP (very high polarization) sugar” was a highlight in terms of change.

The increase of sugar prices is linked to the upward trend of the foreign market, without disregarding the depreciation of the real. In July, the depreciation was 1.6%, though the cumulative in 2020 achieved 28.5% and between July 2019 and July 2020, 39.7%. The depreciation also affected other products, since all of them are exported.

Petroleum refining and ethanol products: in the second month in a row, after four negative results, the sector prices had positive changes, 11.65%. It is worth mentioning that between February and May, it accumulated a rate of -36.67% and between June and July the rate was 30.81%. Anyway, until July the sector accumulated a change of -16.62% and, -7.29% in comparison with the same month of 2019.

The sector was a highlight due to its results, the second price change among all mining and quarrying and manufacturing activities, the second in the comparison with the previous month (0.98 pp, in 3.22%) and in the cumulative of the year (-1.77 pp, in 7.28%), and the fourth influence in the cumulative of 12 months (-0.72 pp. in 11.13%).

Regarding price comparison between July and June, all changes were positive, prevailing, among them, the petroleum derivatives. In terms of influence, the major result, together with petroleum derivatives - especially two products with biggest weight in the sector calculation - “diesel oil” (40.74%) and “motor gasoline and for other purposes, except for aviation” (23.06%) - was “ethyl alcohol (anhydrous or hydrated)”. The four products with major influence recorded 10.32 pp from the change of 11.65%, which means, 1.33 pp is the joint influence from the other six products in the sector.

Basic metals: when comparing the average prices of July against June, it changed from 2.21%, the sixth increase in the year (only in June didprices decreas, -3.22%). As a result, the cumulative of 2020 remained as 16.92% and the cumulative of 12 months achieved the change of 17.57%. It is worth mentioning that, in the cumulative change of the year,this is the highest result for a month of July in the whole time series.

The month result was due to, mainly, three products, with two from the steel industry and one from non-ferrous, all of them with positive price changes. They are: “uncoated hot-rolled steel carbon coils”, “galvanized or chrome-plated steel coils or sheets” and “gold for non-monetary purposes”. The product “aluminum oxide (calcined alumina)” was also a highlight in terms of influence, though with negative impact in the result. Those four products represented 1.36 pp of the monthly change, with 0.85 pp as a result of the other 20 products.