In February of 2011, the Producer Price Index (IPP) changed 0.60% compared with the previous month...

In February of 2011, the Producer Price Index (IPP) changed 0.60% compared with the previous month; a higher result than the ones achieved in January (0.40%) and December (0.43%).

Comparing the current month with the same month a year ago, prices changed 6.21% in February and 6.88% in January. The indicator closed 2010 at 8.04% and accumulated a change of 1.00% up to February of 2011.

IPP is the new monthly index that starts to be published today by IBGE. It measures the development of "factory gate" prices, excluded taxes or freight, for 23 manufacturing industry sectors. The survey complete publication can be accessed at www.ibge.gov.br/home/estatistica/indicadores/precos/ipp/.

Other chemical products record the highest rise (3.39%) of February

In February of 2011, 16 of the 23 activities surveyed registered highs in prices. The four major changes of February in contrast with January were from other chemical products (3.39%), textiles (2.51%), footwear and leather products (2.46%) and apparel and accessories (2.03%). The increases in textiles (4.99%) and other chemical products (3.23%) were among the major changes of January against December of 2010. Likewise, the major drops were from computer equipment (-3.19%) and metallurgic products (-2.96%). The items to exert the greatest influence, or impact, on the change of February against January (0.60%) were other chemical products (0.36 percentage points), petroleum refinement and alcohol products (0.09 p.p.), metallurgy (0.09 p.p.) and food products (-0.09 p.p.). The same sectors exerted the greatest influence in January (0.40%).

The accumulated indicator of 2011 reached 1.00% in February against 0.40% in January. Among the activities that in February registered the highest percentage changes as to the accumulated indicator, the highlights are textiles (7.63%); other chemical products (6.72%); soap, detergent, cleaning products and toiletries (3.65%) and computer equipment, with a negative change (-3.54%). The sectors to exert the greatest influence were other chemical products (0.69 p. p.), petroleum refinement and alcohol products (0.18 p.p.), textiles (0.16 p.p.) and metallurgy (-0.16 p.p.).

In the accumulated index of the last 12 months, prices rose by 6.21% in February, a lower change than the one observed in January (6.88%). In January and in February, the four major changes of prices occurred for textiles (24.18% in January and 25.44% in February), food products (19.85% and 16.90%), other chemical products (13.38% and 13.59%) and computer equipment (-8.23% and –8.74%). The major influences in the comparison of February with the same month a year ago came from food products (2.86 p.p.), other chemical products (1.37 p. p.), petroleum refinement and alcohol products (0.53 p.p.) and textiles (0.49 p.p.).

Unsaturated ethylene (ethene), polypropylene and propene (the latter with a negative register) were the major influences on the change of other chemical products in February of 2011 against the previous month (3.39%). The products that account for the rate of 6.72% (accumulated of 2011) and of 13.69% (month/same month a year ago) were, mainly, unsaturated ethylene (ethene) and manure or NPK fertilizers.

Compared with January, textiles prices changed, on average, in 2.51%. The major influences on these results were due to price changes of bathing suits and threads of simple cotton. In the accumulated indicator of 2011, prices of textiles reached 7.63%. The major influences came from colored or printed cotton fabric, except blends and threads of simple cotton. At last, by comparing February of 2011 with the same month of 2010, prices in that sector changed, on average, by 25.44%, mainly influenced by the behavior of colored or printed cotton fabric, excluding blends and colored or printed cotton fabric, or colored cotton threads, including blends.

With a change of 2.46% in February against January of 2011, prices of footwear and leather articles were mainly influenced by female footwear (leather and synthetic). Considering the accumulated indicator of 2011 (2.05%), both the increases in prices for female leather footwear and the positive changes for bovine chrome-tanned or dry leather and hides were important to the influence statistics. At last, comparing February of 2011 with the same month of 2010, the aforementioned products exerted the highest positive influence on the rate of 3.95%. Conversely, prices in synthetic female footwear exerted a negative influence.

On a month-to-month basis, in February of 2011, the prices of food products recorded a negative change of –0.45%. With that, in 2011, the sector accumulated an average price change of 0.33%, a contraction in relation to January (0.78%). Despite the drop in prices in the comparison between February and January of 2011, the level of prices was higher than in the comparison of 12 months, both in February (16.90%) and January (19.85%). Five products exerted the greatest influence on the indicators of the sector. Concentrated orange juice (positive influence in the month-to-month, accumulated in 2011 and month/same month a year ago comparisons), cakes, bagasses, bran and other residues from soybean oil extraction (negative, except for the accumulated in 12 months); soybean oil (positive, except for the month-over-month comparison), refined sugar (negative, with no influence, however, in the accumulated index in 12 months) and crystallized sugar (positive only in the accumulated index of 2011).

Compared with January of 2011, the prices of petroleum refinement and alcohol products changed, on average, by 0.79%. The major influences were from non-denatured ethyl alcohol, naphthas for petrochemical industry and kerosene for aviation. The change of 1.65% observed in the accumulated indicator of the year was also influenced by the same products. As for the accumulated indicator in 12 months (4.84%), the most influential products to the result were diesel oil, naphtha and automobile gas.

The indicators for the manufacture of vehicles were virtually stable. The comparison with January and the accumulated indicator of the last 12 months registered negative changes while the accumulated index in the year registered a positive change. Considering any indicator, the major influence, always negative, is attributable to automobiles, jeeps or pick ups, with gasoline, alcohol or biofuel engines, of any engine capacity. It is important to highlight, though, that trucks (in the accumulated indicators of the year and in 12 months) and parts and accessories (in the month-over-month comparison) exerted a positive influence.

The highest rise of 2010 was from food products (21.24%)

The industry prices accumulated an average change of 8.04% in 2010. All over the year, except for the transition between February and March, the series kept increasing. The rise in prices was higher in the last four months of the year (3.46% against 2.99% in the first and 1.39% in the second). Among the 23 activities surveyed, 20 registered increases in prices in the year, while three recorded drops. The main highs were from food products (21.24%), textiles (19.81%) and other chemicals (15.76%). The three activities with negative changes were computer equipment (-5,03%), other transportation equipment (-0.75%) and motor vehicles (-0.15%).

Among the activities that rose in 2010, the major influence came from food production (3.55 percentage points of the 8.04%), followed by other chemicals (1.51 percentage points). For the sectors with falling prices, the major influence came from computer products (-0.21 percentage points).

The contribution, or weight, measures the percentage of a certain change in the overall indicator. Food products, with an accumulated change of 21.24% in 2010, were the major contributor to IPP, accounting for 18.76% of the 8.04% change. That result was offset by motor vehicles, with an accumulated negative change of -0.15% and a weight of 11.91%. That is, the prices for vehicles, virtually stable in the accumulated index of the year, decelerated the growth of prices for the manufacturing industries.

Food, motor vehicles, petroleum products and biofuels, other chemical products, primary metallurgy, machines and tools and computers, electronic products

account for approximately 70% of the production of the manufacturing industries.

The rise in food products (21.24%) is part of the world scenario of rises in the prices of commodities. The main influences on that rate were cakes, bagasses, bran and other residues from soybean oil extraction; concentrated orange juice and crystallized sugar. Considering the contribution to the rate, 40% of the indicator is due to the rises of crystallized sugar; cakes, bagasses, bran and other residues from soybean oil extraction; fresh or chilled beef; concentrated orange juice and refined soybean oil.

In the motor vehicles sector (-0.15%), the major influence came from the price of automobiles of any engine capacity. That product is also the main contributor, followed by diesel trucks with an over-5-ton capacity, used both in agriculture and in civil construction, two growing sectors in 2010.

The rise in petroleum derivatives and biofuels (4.97%) was influenced by the highs in diesel oil and naphtha. In terms of contribution, the rise in diesel oil accounts for a change of almost 5% in the prices of the sector. It was not higher only because gas prices in the accumulated indicator of 2010 remained stable.

Other chemical products

(15.76%) recorded one of the highest accumulated increases in 2010, influenced by unsaturated ethylene (ethene) and manure or NPK (nitrogen, phosphorous and potassium) fertilizers. That order is inverted when contribution is considered, with more importance for manure. The rise in the prices of manure corresponds to the performance of the exporting and intensive consumer agriculture.

The rise in metallurgy (3.95%) was influenced by the evolution of the prices of carbon-steel ingots, blocks, rods and plates; and aluminum square and round plates and stripes. The products with the highest impact on the statistics are the ingots and the unwrought (liquid, mass, ingots, billets, grit, etc.) non-alloy aluminum.

Window, wall or portable air conditioning machines; hydraulic turbines and wheels; compressors of a kind used in refrigerating equipment (commercial or domestic refrigerators, air-conditioning machines and similar articles) and air compressors mounted on a wheeled chassis for towing were the products to exert the most considerable influence on the increase of machines and equipment (1.22%). Agricultural tractors and compressors, both with prices dropping in the accumulated indicator of the year, are the products with the highest impact. The rise in prices across products of low importance account for the positive change of the sector. Exchange rate appreciation has been the main explanation for the downward trend as to the prices of machines, considering those are in open competition with the imported ones.

As for computer and electronic products (-5.03%), there were price drops in eight of the ten products selected for the sector. Cell phones and television sets exerted the major influence and impact. That behavior, which is concentrated in the second semester, is mostly related to the promotions of products originally released for the Soccer World Cup.