Compared with May 2015, the Producer Price Index (IPP) changed 0.31% in June, above the figure registered in the comparison between May 2015 and April 2015 (0.12%). As a result, the cumulative index in the year reached 2.93% against 2.62% in May. The cumulative index in 12 months stayed at 6.56%, above the rate of 6.06% in May. IPP measures the evolution of “factory gate” prices, discounted taxes and freight, of 23 sectors of the manufacturing industry. The complete publication can be accessed on page https://www.ibge.gov.br/home/estatistica/indicadores/precos/ipp/default.shtm.

15 of the 23 activities surveyed recorded prices rises

In June, 15 of the 23 activities surveyed recorded positive price changes against 17 activities in the previous month. The four biggest increases occurred to products belonging to the activities: other chemicals (4.35%), basic metals (-3.56%), pulp and paper (2.74%) and manufacture of wearing apparel and accessories (-2.73%). In terms of influence, in the comparison between June/2015 and May 2015 (0.31%), the highlights were other chemicals (0.47%), basic metals (-0.29 percentage points), pulp and paper (0.10 percentage points), and computer, electronic and optical products (-0.07 percentage points).

The cumulative indicator in the year (June/2015 versus December/20124) reached 2.93%, versus 2.62% in May 2015. Among the activities with the biggest percent changes, the highlights were other transportation equipment (13.85%), tobacco (12.05%), pulp and paper (11.26%) and wood (10.21%).   In this indicator, the most influential sectors were (table 3) were other chemicals (0.79 percentage points), pulp and paper (0.39 percentage points), motor vehicles (0.37 percentage points) and other transportation equipment (0.30 percentage points).

The comparison between June 2015 and June 2014 2010 (cumulative in 12 months), the price change was 6.56%, versus 6.06% in May. The biggest price changes were those of other transportation equipment (27.22%), tobacco (25.27%), pulp and paper (21.16%) and wood (20.09%). The main influences came from other chemicals (1.12 percentage points), automotive vehicles (0.91 percentage points), food products (0.78 percentage points) and pulp and paper (0.71 percentage points).

Food products: after two consecutive negative rates, the prices of food products changed by 0.15% in the comparison between May and June. As a result, up to June, there was cumulative increase of 1.17% in 2015. Versus June 2014, the latest prices are 3.93% higher. In terms of highlights, two products appear both in terms of change and influence: sterilized milk/UHT/long life milk and frozen beef, both with positive changes. The only negative change, in terms of influence, was that of crystallized sugar. The last product among the most influential ones was residue of soybean oil extraction. The four products had an influence of 0.41 percentage points, in the change of 0.15%. That means the other 39 food products had an influence of 0.26 percentage points. The fall of crystallized sugar is linked both to a smaller internal dynamics and to a bigger international supply. Regarding beef, the limited supply has caused the prices of animals for slaughter to rise, and that ends up affecting prices, even in a moment of strong demand.   In the case of soybean derivatives, especially soybean residue extraction, the rise is justified in an environment of devaluation of our currency, good Brazilian exports, and also rise of soybean prices in the Chicago Stock Market due to harsh climate conditions in the USA. The rise of milk, in turn, is an effect of the period between harvests.

Pulp and paper: The sector had an average rise of about 2.74% in June 2015, the biggest this year. As a result, cumulative results in the sector were 11.26% in 2015 and 21.16% in 12 months. The sector had its third cumulative increase in the year, due to the rise of production costs, including manpower and raw material, priced in dollar. Considering the 2.93% hike in June in all manufacturing industry, the sector had the second major influence (0.39 percentage points), being second to manufacturing of chemicals, only. The most influential products to the rise of 2.74% in June were notebooks; pulp, paper for writing, printing and related uses, uncoated. The influence of price changes in the sector, in June, to the total manufacturing industry was 0.10 percentage points.

Other chemicals: chemical industry recorded a change of 4.35%, which led to a cumulative increase of 7.30% in the year and of 10.38% versus the same month in 2014, the biggest rate in this type of comparison since July 2013. The scenario of industry for basic and intermediate petrochemicals for plasticizers, resins and fibers is strongly related to international prices and to the price of naphtha, a product which faced a significant fall between December 2014 and March 2015, followed by a recovery of prices last quarter. Besides the rise of naphtha in the last quarter, the sector recorded rise of costs associated to energy, to the purchase of raw material and the currency (dollar depreciation in comparison with the American currency by 39.2%). The highlighted products in terms of price changes versus the previous year were [styrene-butadiene rubber, non-saturated ethylene/ethene, non-saturated propene (propylene) ammonium sulfate or urea. In terms of influence, in the month-on-month analysis, the highlighted products are practically the same, only NPK fertilizers replace styrene-butadiene rubber, also with positive figures. The four most influential products represented 3.05 percentage points in the result of 4.35%, that is, the other 28 products represented 1.30 percentage points. Considering the cumulative index in the year and in 12 months, only products related to agriculture feature as a highlight: NPK based fertilizers and superphosphates.

Basic metals: in June, there was, for the third time in a year and consecutively, a negative change (-3.56%). As a result, in the last 12 months, the sector recorded a change of 2.79%, and cumulative in the year, of -1.17%. All the highlighted products in the change and influence presented negative results in the month-on-month comparison. In terms of change and influence, the highlights were stainless steel coil or sheet, including strips and carbon steel cold-rolled coil, uncoated. To these two products can be added, in terms of change, zinc-coated stainless steel coil or sheet and rectangular or square-shaped aluminum plates and strips, non-alloy aluminum in raw- forms and carbon steel ingots, blocks, rods or plates. Among the 22 products selected for the survey, the four highlights regarding the analysis of influences in comparison with May represent -2.43 percentage points of the monthly change (-3.56%). The behavior of this sector is influenced by the combination of results from groups of steel (related to steel products) and non-ferrous material (copper and aluminum) The former is affected by the surplus steel capacity in the world, besides the high cost of electricity and natural gas; in the second group, prices followed the pricing of international stock markets and the depreciation of real. In the steel industry, the results of prices in the last 12 months was influenced by the exports of plates, decrease in the domestic demand and increase of costs, whereas, for non-metallic minerals, international prices are the main factors for the price changes observed.

Computer, electronic and optical products In March 2014, versus February, the sector of computer, electronic and optical products recorded fall of 2.54% in prices. The prices of this sector recorded positive change of 1.39% compared to that of the previous month. In comparison with June in the previous year, the indicator changed by -5.66%. The influence of the monthly change observed for this activity on the index pf manufacturing industries was -0.07 percentage points. The most influential products to the monthly change of prices in this sector were mobile telephones and smart cards. In terms of positive monthly contribution, the highlights were electricity gauges and recorded or reproducers of audio-video signals. The indicators for the last 12 months and cumulative in the year were also affected by the prices of mobile telephones, besides projectors and computer monitors.

Motor vehicles: the prices observed in June, versus those of May, changed, on average, -0.25%. This is the first negative result since March 2014. As a result, the cumulative index fell by 3.57% in May to 3.32% in June. In comparison with the same month a year ago, the series, which grew between the months of June 2014 (2.62%) and May (2015 (8.61%) was reversed, resulting in 8.28% in June 2015 versus June 2014. Among the highlights in terms of monthly change, three products are mentioned in terms of both monthly change and influence: cable harness for motor vehicles, gearbox for motor vehicles and chassis with engine for buses or for trucks, with only positive price changes for the second one. The fourth product in terms of influence was flex-fuel, gasoline or ethanol passenger car with any engine power output, representing the biggest contribution to the calculation of the sector, with negative price change as well. These four items accounted for -0.35 percentage points of the -0.25% rate. Long-term analyses show that among the four products previously listed only flex-fuel, gasoline or ethanol passenger car with any engine power output appear both in terms of cumulative index in the year and in 12 months, with positive influences in both cases.

Other transportation equipment: in June 2015, the prices of this sector recorded positive change of 1.11% in relation to the previous month. The result of this indicator depends, to a great extent, from the exchange rate (R$/US$), so much so that, in terms of cumulative index in the year, there was change of 13.9% versus a currency change of 17.9% and, in the last 12 months, a change of 27.22%, versus currency devaluation of 39.2%. In June, the sector recorded fall of prices, in relation to May, only in the product motorcycles, with more than 50 cm3. The other products, considering the three types of indexes analyzed (month-on-month, cumulative in the year and cumulative in 12 months, there was positive change of prices.