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Industry prices rise 2.16% in October

Section: Economic Statistics | Caio Belandi

December 01, 2021 09h00 AM | Last Updated: December 01, 2021 11h04 PM

Oil refining recorded biggest increase and highest influence in October - Photo: Tais Peyneau/Petrobras News Agency

Inflation in the industry sector is up 2.16% in October from September, according to data from the Producer Price Index (IPP), released today (01) by the IBGE. With the result of industry prices, there was cumulative increase of 26.57% in 2021, highest index for a month of October since the start of the time series in 2014. The cumulative index in 12 months was of 28.83% and it has decreased since June, when the result was 36.78%.

The increase recorded in October is the hghest since April (2.19%), marked by a series of more than two years of inflation in industry. IPP last recorded a negative change in August 2019.

The survey measures the change in the prices of products at the "factory gate", without tax or freight, of 24 activities of the mining and manufacturing industries. Among these, 22 recorded an increase in October, the highlight being oil refining and alcohol products, which recorded the biggest change (7.14%) and also the main influence on the general result (0.73 percentage points out of the 2.16%). The sector has recorded positive results since May.

“This rate reflects the change in crude oil, whose price has risen in the international market,” says the manager of the survey, Alexandre Brandão. The cumulative index in the year of the activity is 60.38%, highest rate observed for a month of October since the start of the time series in 2014.


The rise in the activity of other chemicals (6.38%, second highest) accounted for the main influence (0.59 p.p.) on the month’s result. These results are mainly linked with the international prices, including the price change of several types of raw material, either imported or not, like naphtha, for instance. Also, the demand of industry for chemicals is on an upward trend.

““That sector is directly affected by oil refining. So, the rise in refining ends up pushing the result of other chemicals,” Mr. Brandão highlights. Another reason for the increase in this sector are prices of manure or fertilizers, whose national products follow international prices that rose due to exchange depreciation, once the market depends to a great extent of imports.

The other two sectors recorded significant increases in October: rubber and plastic (3.45%) and other transportation equipment (3.44%). Food products rose 0.75%, and accounted for the fourth biggest influence (0.18 p.p.) on the general result of IPP in the month. What calls attention is the rise of prices of VHP sugar and of fresh or cooled beef. The depreciation of real against the dollar may be a reason to explain the index.

“In the case of beef, some meat processors reported increased demand, including the restart of exports,” explains the manager of the survey. “In the case of sugar, limited supply exerts a growing effect on prices”. Prices of ground and roasted coffee also added to the rise of the sector, due to the harsh winter conditions.

In 2021, the activity recorded a decrease for only one month, in June (-0.14%,). On the other hand, October has recorded the lowest positive change in the year so far. The cumulative rise of prices of this activity is of 15.68%.

More about the survey

The IPP aims at measuring the average change of sale prices received by the domestic producers of goods and services, as well as their evolution over time, signaling the short-term inflationary trends in Brazil. It is a key indicator for the macroeconomic follow up and, consequently, a valuable analytical instrument for decision makers, either public or private.

The survey investigates, in slightly more than 2,100 enterprises, the prices received by producers, free from tax, tariffs and freight, defined according the most usual commercial practices. Nearly 6 thousand prices are collected monthly. The complete tables with the results are available at Sidra.

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