IPP
Industry prices rise for the third time and stay at 0.64% in October
November 29, 2019 09h00 AM | Last Updated: November 29, 2019 10h39 AM
The Producer Price Index (IPP), which monitors the prices of mining and quarrying and manufacturing industry, recorded an increase of 0.64% in October, in comparison with September, as released today by the IBGE. That resulted was pushed by the rise of diesel, gasoline and fuel oil prices, and also of food prices, mainly beef. That is the third hike in a row, against 0.45% recorded in September.
The IPP measures the change in product prices at "factory gate", free of tax and freight, of 23 mining and quarrying and manufacturing activities. With the October result, inflation in industry had a cumulative increase of 3.65% in the year. In 12 months, the rate up to October was a hike of 0.37%, after a decrease (-0.95%) in the previous year.
In October, 15 of the 24 activities surveyed recorded positive price changes. The four biggest ones came from mining and quarrying industry (-4.76%), oil refining and ethanol products (4.04%), food products (2.12%) and pulp and paper (-1.89%). In terms of contribution to the overall index, the highlights were food products (0.47 percentage points), oil refining and ethanol products (0.41 percentage points), mining and quarrying industry (-0.22 percentage points) and other chemicals (-0.10 percentage points).
The rise of food prices was the biggest since June last year. “In that group, beef has had a significant effect on the IPP, since August. Two movements have contributed to that: the depreciation of the real against the dollar and the increased demand from China. The Chinese faced problems related to pork and started to order protein from other countries”, says the IPP manager, Alexandre Brandão.
Another positive contribution came from oil refining and ethanol products, which have recovered prices throughout the year. “That is a fact”, says Brandão, who also highlights, on the other hand, the decrease of prices of mining and quarrying industry in October (-4.76%), after a significant decrease of 10.49% in the previous month. “The price fluctuation of iron ore in the international market, influenced by China, affects the prices of mining and quarrying industry”.
