Producer Prices
Industry inflation reaches 3.22% in July, biggest rise since 2014
September 02, 2020 09h00 AM | Last Updated: September 02, 2020 11h14 AM
Industry prices rose 3.22% in July compared to the previous month, registering the highest increase since the beginning of the time series (January 2014) of the Producer Price Index (IPP), released today (2) by the IBGE. The result mainly reflects the increase in the cost of food and activities related to petroleum products and biofuels.
In the monthly comparison, this is the twelfth consecutive increase in 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 7.28%. In the last 12 months, industry inflation was 11.13%, the first index above 10% since November 2018 (11.85%).
Food, which has the main weight in the general index (about a quarter of the indicator), after decreasing in June (-0.73%), increased again (3.69%) and accumulates 12.03% in the year - this being the highest rate for the sector since July 2012 (previous series of the IPP, which did not include the mining and quarrying industry), when it was 12.09%. Compared to July 2019, the latest prices were 23.78% higher.
“The sector was impacted mainly by a high in demerara sugar, poultry meat, soybeans and soybean oil. These products were influenced by the exchange rate, but also by other factors. In the case of sugar, there was an increase in the foreign demand. In the case of poultry, on the other hand, its domestic consumption increased, in addition to the price rise in corn and soybean meal, which are feedstock for birds. In the case of soybeans, there was an increase in demand for soybean oil, which is the raw material for biofuel ”, explains IBGE researcher Alexandre Brandão.
Petroleum refining and ethanol products also had a positive change (11.65%), and for the second consecutive month, after four negative results. From February to May, the activity had accumulated decrease of 36.67%, but in June and July it accumulated increase of 30.81%. Thus, in the year, the sector accrued a change of -16.62%. In comparison with the same month of 2019, the fall in July was -7.29%.
In relation to major categories, intermediate goods, which have a great influence on the index (2.26 percentage points), jumped in costs, changing the rate from -0.32% in June to 4.19% in July.
Other changes worthy of a highligh from May to June were those of the mining nd quarrying industries (14.46%), tobacco (4.69%) and toiletry, soaps and cleaning products (3.77%). In terms of influence, in addition to petroleum refining and ethanol products (0.89 pp) and food (0.90 pp), the mining and quarrying industries (0.68 pp) and basic metas (0.14 pp).
