Producer Prices

Industry inflation at 3.40% in October, biggest increase since 2014

Section: Economic Statistics | Carlos Alberto Guimarães

November 26, 2020 09h00 AM | Last Updated: November 26, 2020 10h24 AM

Price rise in products of oil and fat manufacturing had an impact on the IPP high - Photo: AEN/PR

Industry prices rose 3.40% in October compared to September, the highest increase since January 2014, the beginning of the time series of the Producer Price Index (IPP). The result, released today (26) by the IBGE, mainly reflects the rise in prices of food and products from the mining and quarrying industries. Prices rose in 23 of the 24 activities surveyed.

This is the fifteenth consecutive increase in the month-to-month comparison of the indicator, which measures the change in “factory gate prices”, excluding taxes and freight, of 24 activities in the mining and quarrying and manufacturing industries. In the year, the IPP accumulated an increase of 17.29%. In the last 12 months, industry inflation reached 19.08%.

Food, which has the main weight in the general index (about a quarter of the indicator), registered an increase of 4.60% in the month, maintaining the positive changes observed since July. In the year, the change was 28.36% and, in 12 months, 35.89%. Both are the largest in their series.

"In terms of group, the prices of products for the manufacture of vegetable and animal oils and fats and for the manufacture and refining of sugar had changes above the sector average in the comparison of October against September, of 13.48% and 4.98% , respectively ", observes the IPP manager, Alexandre Brandão.

In terms of influence on the October indicator, in addition to food (1.17 pp), there is a highlight to mining and quarrying (0.53 pp), other chemicals (0.36 pp) and basic metals (0.31 pp).

In October, the average price change in the mining and quarrying industry was 9.71%, the seventh consecutive increase in the year. With that, until October, prices in 2020 changed by 50.31% and, in comparison with the same month of 2019, the change was 53.64%. These results are influenced by the exchange rate, with the depreciation of the real against the dollar of 4.2% (October versus September), 36.9% (between December 2019 and October 2020) and 37.6% (in the last 12 months). They also reflect the movement in international prices for “crude petroleum oil” and “iron ores and concentrates”.

Other relevant changes were those of the chemical industry (4.52%), with the fourth consecutive increase and the second highest result of the year, and basic metals (4.93%), the second largest in the IPP series, second only to that of seven months ago, when it reached 5.74%.

In relation to the major categories, it was intermediate goods - with a 2.74% influence on the index - that caused prices to rise 5.01% in October.