In May 2020, industry prices rose 1.22% against the April 2020 figure. The cumulative index in the year reached 3.37%. Versus May 2019, 16 of the 24 activities recorded positive price changes, against 20 in the previous month.  

The Producer Price Index (IPP) of 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 and semi-durable and non-durable).

In May 2020, industry prices changed, on average, by 1.22% against those of April 2020. The following activities of industry recorded the four major changes: mining and quarrying industry (9.13%), oil refining and ethanol products (-5.78%), other transportation equipment (4.57%) and textiles (4.36%). The main contributions came from: food products (0.60 percentage points, p.p.), oil refining and ethanol products (-0.41 p.p.), mining and quarrying industry (0.39 p.p.) and motor vehicles (0.15 p.p.).

The cumulative index in the year reached 3.37%, against 2.13% in April/2020. The biggest changes came from: oil refining and ethanol products (-36.27%), other transportation equipment (23.01%), wood (18.86%) and basic metals (18.25%). In terms of the cumulative index in the year, the most influential sectors were: oil refining and ethanol products (-3.86 p.p.), food products (2,12 p.p.), basic metals (1.06 p.p.) and other chemicals (0.71 p.p.).

In terms of the cumulative index in 12 months, there was a price change of 4.60%, versus 4.79% in April/2020. The four major changes were recorded by oil refining and ethanol products (-36.02%), other transportation equipment (27.14%), wood (17.85%) and food products (17.59%). The most relevant sectors were: food products (3.88 p.p.), oil refining and ethanol products (-3.87 p.p.), basic metals (0.90 p.p.) and motor vehicles (0.60 p.p.).

 The price change by 1.22% against April resulted in the following results for the major economic categories: 3.08% for capital goods; 1.00% for intermediate goods; and 1.14% for durable goods, being 1.58% for durable consumer goods and 1.04% for semi and non-durable goods..

To the industry overall, 1.22%, the contribution from major economic categories was as follows: 0.24 p.p. from capital goods, 0.55 p.p. from intermediate goods and 0.43 p.p. from consumer goods. In terms of consumer goods, 0.32 p.p. came from changes in semi-durable goods and 0.11 p.p. from durable goods.

In terms of the cumulative index in 2020, there were price changes in industry, up to May, 3.37%, being 11.20% the change of capital goods (with an influence of 0.84 p.p.), 5.23% that of intermediate goods (2.80 p.p.) and -0.68% that of consumer goods (-0.27 p.p.). In this segment, the result was due to durable consumer goods (0.26 p.p.) and semi and non-durable goods (-0,53 p.p.).

In the May 2020/May comparison, industry prices changed by 4.60%, as follows: capital goods, 14.02% (1.03 p.p.); intermediate goods, 4.31% (2.35 p.p.); and consumer goods, 3.20% (1.22 p.p.), being 0.38 p.p. from durable consumer goods and 0.84 p.p. from semi and non-durable goods. 

See the highlight below:

Mining and quarrying industry: in May, the prices of the sector rose 9.13% against April, the biggest influence on the overall index (0.39 p.p. 1.22%). That is the biggest positive change of the activity since March 2019 (12.13%). The cumulative index in the year stayed at 4.77%, a positive result after two months of decrease in this indicator. In terms of the cumulative index in 12 months, there is still a negative change of (of -3.04%), as well as in March (-6.30%) and April (-5.38%).

Food products: in May, food products rose, on average, 2.47% against April. In the series that goes from August 2019 to May 2020, January was the only month to record a negative decrease (-1.91%). In this period, the cumulative price change was 20.42%, and, in 2020, the cumulative increase was of 8.99%. Against the same month in 2019, the May figure was of 17.59%.

Besides accounting for the main contribution to the overall result, 25.99%, food products recorded the biggest change in the May 2020/May 2019 comparison, the main influence of indicators against the previous month (0.60 p.p., in 1.22%) and cumulative in 12 months (3.88 p.p., in 4.60%) and the second cumulative in the year (2,12 p.p., in 3.37%).

The main highlight in terms of in terms of influence (“fresh or chilled beef”, “VHP sugar (very high polarization)”, “residue of soybean extraction” and “poultry meat and giblets”) accounted for 1.74 p.p. of the 2.47% change. These products are important in the list of Brazilian exports, and, therefore, the rise of prices was linked to the depreciation of real, 6.0%, which reached 37.3% throughout 2020. In the case of “poultry meat and giblets”, although exports had an incentive from the demand from China, the prices in the in the domestic market had the same negative impact, which was predominant.

Oil refining and alcohol products in the May/April comparison, the average price change of the sector was negative, for the fourth consecutive month (-5.78%). In the year, the change was of -36.27% and in 12 months, of -36.02%. In May, the index number was of 76.71, a figure that is close to the average in 2016, 77.32. 

The list of highlights in terms of change and influence is almost the same. “Naphthas” appears among the changes, but not in terms of influence, and “ethyl alcohol (anhydrous or hydrated)” in terms of influence, but not of change. The overall influence of the four products listed in the chart below) was of -5.70 p.p., in -5.7tionimen8%. It is worth mentioning that the only positive change in the products listed was that of “gasoline, except for aviation”.

Other chemicals: industry recorded an average change of prices, against April, of 0.23%, the lowest positive change in the last four months, considering March had had the biggest positive price change  since the start of the survey in December 2009. The sector had a positive change of 9.14% in 2020, very differently from what took place in May  2019, when it had been negative by –3.17%. In the cumulative index in 12 months, the activity reached 5.33%. The chemical sector accounted for the main contribution to the index and represented the third major contribution (8.56%) to the general indicator results.

Among the four most influential products on the monthly result (0.50 p.p. in 0.23%), the already mentioned “benzene” and “non-saturated propene (propylene)” recorded negative changes. The other ones recorded positive rates and belong to the previously mentioned economic groups: “manure or fertilizers or phosphate chemicals” and “herbicides for use in agriculture”. 

Basic metals: Against April, there was a change of 1.04%, completing, that way, five positive price changes in a row. As a result, the cumultive index in the year stayed at 18.25%, the biggest cumulative increase cumulative index in 12 months, the change was of 14.90%.

The monthly result was reached thanks, mainly, to four products, being two from the group of ferrous metals and two of non-ferrous ones. They are: “carbon steel ingots, blocks, rods or plates” with a negative result, “gold for non-monetary use”, “aluminum oxide” and “iron-niobium”, all of them with positive price changes over the M/M-1 indicator. Four of them represented 0.61 p.p. of the monthly change, being 0.43 p.p. for other 20 products. Thesesame products were a highlight in March and April.

Motor vehicles: in May, the change was of 1.80% against April. That result, besides representing the ninth consecutive month of average increase, accounts for the biggest price change in the sector since January 2016 (when there was an increase of 2.13%). As a result, the cumulative change in the year reached 5.18%, being the highest for a month of May for that indicator in the entire time series. And the cumulative change in the last 12 months recorded an increase of  7.47%. In addition to being the second main contribution to the overall indicator (8.60%), the activity was a highlight, among all the sectors surveyd, for beingthe fourth main influence on the monthly indicator  (0.15 p.p. in 1.22%) and cumulative indicator in 12 months (0.60 p.p. in 4.60%). 

The activity of motor vehicles, besides accounting for the second biggest contribution to the calculation of the overall indicator (8.60%), stood out, among all the sectors surveyed, for being the fourth main influence on M/M_-1 indicators (0.15 p.p. in 1.22%) and M/M_-12 (0.60 p.p. in 4.60%).

In an analysis of the products of the sector, it is possible to observe that, among the four most influential products in the monthly comparison, all of them had a positive effect on the index: “passenger cars, gasoline or biofuels”, “injection bombs for motor vehicles”, “brakes and their pieces and accessories, for motor vehicles” and “gasoline or ethanol vehicles for the transportation of goods with a capacity non-above 5 t”. The influence of these most influential products on the monthly change against the previous month was of 1.43 p.p., that is, the other 19 products of the activity accounted for 0.37 p.p.