In June of 2011, the Producer Price Index (IPP) changed -0.66% compared with the previous month; a lower result than that recorded in May(-0.46%).

When compared with the same month a year ago (accumulated in 12 months), prices changed 4.89% in June and 5.69% in May. Conversely, the accumulated change in 2011 was of 0.55% in June and of 1.22% in the previous month. 

The IPP measures the evolution of the "factory gate prices", discounted taxes and freight, of twenty-three sectors of the manufacturing industry.

The complete publication can be accessed at www.ibge.gov.br/home/estatistica/indicadores/precos/ipp.

Fifteen of the twenty-three activities surveyed registered a drop in prices

In June of 2011, fifteen of the twenty-three activities surveyed registered a drop in prices, against ten in the previous month.

The four major changes of June in relation to May came from optical, electronic and computer equipment (-3.80%), fabricated metal products (-2.64%), textiles (-2.41%) and basic metals (-1.86%). The items to exert the greatest influence, or impact, on the change of June against May (-0.66%) were food products (-0.27 percentage points), basic metals (-0.16 p.p.), other chemical products (0.13 p.p.) and optical, electronic and computer equipment (-0.13 p.p.).

The accumulated indicator of 2011 reached 0.55% in June against 1.22% in May.

Among the activities that registered the highest percentage changes as to the accumulated indicator, the highlights were optical, electronic and computer equipment (-9.42%); other chemical products (9.15%); textiles (7.93%) and rubber and plastic (7.68%). The sectors to exert the greatest influence were other chemical products (0.94 p.p.), food products (-0.85 p.p.), petroleum refinement and alcohol products (0.38 p.p.) and optical, electronic and computer equipment (-0.34 p.p.).

When compared with the same month of 2010 (accumulated in 12 months), prices rose 4.89% in June against 5.69% in May.

The four major price changes came from textiles (22.00%), other chemical products (16.82%), food (16.16%) and optical, electronic and computer equipment (-16.04%). The major influences in the comparison of June with the same month a year ago came from food products (2.60 p.p.), other chemical products (1.68 p.p.), petroleum refinement and alcohol products (0.69 p.p.) and optical, electronic and computer equipment (-0.65 p.p.). 

The prices of food changed –1.5% in June, a contraction of –4.53% in the annual accumulated index and a rise of 16.16% compared with June of 2010. Among the 43 products selected to represent this activity in IPP, 13 stood out in terms of change, influence or contribution.

Oilcake, bagasse, bran and other residues from the extraction of soybean oil were major contributors to the indicators this month, but they were not highlights against June of 2010. Coinciding with the sugarcane harvest period, sugars (crystallized, refined and demerara) stood out with a negative change in relation to May (demerara and crystallized), and with a negative influence in the monthly index (the three types of sugar) and in the accumulated index in 2011 (crystallized and refined). In the index accumulated in 12 months, the crystallized sugar was a positive influence. In the change accumulated in the year, coffee (specially toasted coffee) registered positive changes, but not enough to compensate for the drops in the sector.

The prices of textiles decreased by 2.41% in June, contributing to a reduction in the accumulated results of the year (7.93%) and of the last twelve months (22.00%).

Similarly to what was observed in the previous month, cotton products recorded a negative change in their prices. The negative highlights were the prices of bathing suits, cotton monofilament yarn and cotton multifilament spun yarn.

Petroleum refinement and alcohol products

recorded a negative change of –0.39% in relation to May of 2011, the second consecutive drop in the year. The indicator of June reduced the upward trend, observed for the accumulated index of the year, with a high of 3.52%, and for the last twelve months, with a high of 6.30%. Such a drop is mainly attributable to the decrease in the ethyl alcohol prices, which, in turn, is due to the period of harvest started last month. The ethyl alcohol dropped in the comparison between June and May, negatively influencing the result of –2.04% of the whole sector, while the other products exerted a positive influence. The sum of influences from the main four products (ethyl alcohol, basic lubricant oils, naphtha and aviation kerosene) amounted to a value of –0.39 p.p. for the monthly indicator. However, ethyl alcohol continues to contribute positively both to the indicator accumulated in the year and to the one of the last 12 months. The same happens to the other main products: aviation kerosene, naphtha and basic lubricant oils.

Other Chemical Products

recorded a positive change of 1.23% in the prices of June this year, when compared with May of 2011. That represents a change of trend, after the lowest value for a monthly change, in May, since July of 2010, when it dropped –0.89% against the previous month. In the year, the sector accumulated a high of 9.15%, and for the last twelve months a high of 16.82%. In this sector, part of the products connected to the petrochemical industry recorded a negative change. That is the case of polyethylene products (both high- and low-density), which stood out among the four main changes of June. The same happened to the prices of agrochemical products and disinfectants (for agriculture and other use). The highlights as to monthly change were the insecticides, as for monthly influence, manure or complex nitrogenous, phosphatic or potassic fertilisers. Conversely, ammonium sulfate was a positive change highlight. The high, at the end of 2010 and at the beginning of 2011, of products connected to the petroleum chain sustained the prices of propane, polypropylene, polystyrene and styrene-butadiene rubber as the highlights of the indicator accumulated in the year. The scenario is similar for the indicator in the last twelve months: the positive highlights were ethylene, propane, ammonium sulfate and manure and complex nitrogenous, phosphatic or potassic fertilisers.

Basic metals recorded a negative change of –1.85% in relation to May, first drop of the monthly indicator since January, when it registered –2.96%. The activity recorded a positive change in the indicator accumulated in the year, with 0.23%. Considering the last twelve months, however, the indicator accumulated –3.82%. Three of the four products with the highest influence on the monthly indicator are from the iron chain: ingots, blocks, carbon-steel rods or plates, carbon-steel wire rod and stainless steel coils. The exception was the non-alloy aluminium. The four, altogether, were responsible for –1.86 p.p. of the indicator of the whole sector. For the accumulated indicator of the year, besides ingots, blocks, carbon-steel rods or plates and non-alloy aluminium, which also stood out in the monthly indicator, other highlights were cold-rolled steel coil or galvanized steel plates.

In the indicator accumulated in the last twelve months, the three highlight products of the steel chain recorded negative changes:

hot-rolled, carbon-steel coils; cold-rolled, carbon-steel coils and galvanized steel plates or coils. Non-alloy aluminium is also among the highlight products in the twelve-month accumulated index.

The prices of optical, electronic and computer equipment registered a reduction of – 3.80% when compared with May.

As a result, the sector accumulated a –9.42% change in 2011. Compared with June of 2010, the prices of optical, electronic and computer products dropped -16.04%. In the comparison with the previous month, the series recorded a rate of –0.35% in April, of –2.35% in May and of –3.80% in June. Conversely, the series accumulated in 12 months, which changed from –9.32% in April to –12.51% in May, now contracts to –16.04%. Those figures, altogether, point to a downward trend all over 2011. Compared with May, the sector registered the highest monthly change of prices and the third major monthly influence (0.13 p.p.). In the annual accumulated index, it registered the highest change of prices and the third accumulated influence (0.34 p.p.). In the accumulated index of the last 12 months, it registered the highest negative change of prices (-16.04%) and the fourth annual positive influence, but the first negative influence (0.65 p.p.). The major negative influences on the monthly index came from cell phones, televisions, electronic components and printers, including multifunctional. Electronic components had a positive sign (3.82 p.p.), accounting for almost the whole index (3.80%).

On a month-to-month basis, the prices of motor vehicles recorded a negative change of –0.16%.

In the accumulated index of the year, the change was of 0.16%, below the one registered in the previous month (0.32%). In the comparison with June of 2010, the sector recorded a negative change of –0.02%. The major influence on the monthly index was from passenger automobiles, by gas, alcohol or biofuel, whatever the motor power. However, they do not appear among those with the highest change of prices in all the three comparisons usually made (monthly, in the year and in 12 months).