In October of 2013, the Producer Price Index (IPP) changed -0.37% compared with the previous month; a lower result than those of September/13 and August/13 (0.57%). This is the first negative result in the series since February 2013 (-0.35%). The cumulative indicator of 2013 reached 4.47%. The cumulative index in 12 months was 5.18% in October, against 5.81% in September. 

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 at www.ibge.gov.br/english/estatistica/indicadores/precos/ipp.

Nine out of the 23 activities surveyed registered price rises

In October 2013, nine of the 23 activities surveyed registered a high in prices, against 13 in the previous month. The four highest changes, both positive and negative, of October over September occurred in: tobacco (-2.60%), beverages (2.43%), other transportation equipment (-2.29%) and other chemicals (-1.80%). The sectors to exert the greatest influence in this comparison were other chemical products (- 0.20 p.p.), food (-0.10 p.p.), beverages (0.07 p.p.) and basic metals (-0.07 p.p.).

The cumulative indicator in the year (October/13 against December/12) reached 4.47%, against 4.85% in September/13. Among the activities with the biggest percentage changes the highlights are: beverages (8.93%), textiles (8.63%), tobacco (7.47%) and printing (-6.73%). The sectors to exert the greatest influence in this comparison were food (1.10 p.p), basic metals (0.48 p.p.), petroleum refining and ethanol products (0.45 p.p.) and other chemical products (0.45 p.p.).

When compared with the same month of 2012 (cumulative in 12 months), prices rose 5.18%, against 5.81% in September. The four major price changes came from tobacco (10.50%); beverages (7.87%), textiles (7,84%) and paper and pulp (7.68%). The highest influences came from food products (1.33 p.p.), petroleum refining and ethanol products (0.57 p.p.), basic metals (0.54 p.p.) and other chemical products (0.48 p.p.).

Food: October's result (-0.47%) is the first negative result since March 2013 (-1.22%). Therefore, the cumulative index in the year shrank from 5.93% in September to 5.43%. Even so, in the comparison with the same month in the previous year, the series has been growing since July 2013 (3.58%), reaching 6.64% in October. Of notice is that of the three Octobers in the series that starts in December 2010 (2011, 2012 and 2013), the latest one posts the lowest result (9.88% in October 2011 and 13.17% in 2012).

In terms of influence of the indicator in relation to the previous month, the negative highlights are "sterilized/UHT/Long Life milk"; the other highlights are "crystallized sugar" (the only one with a positive change); "residue of soybean extraction" and "frozen poultry and giblets". The four highlights in terms of influence contributed with -0.37 p.p. (of -0.47%). It is worth mentioning that in October, for the second month in a row, the Real increased in relation to the Dollar (3.6% in October and 3.1% in September), with a down impact in the indicator. Coupled with that, in the case of soybeans, are the American crops, also pushing prices down. In the case of sugar, several factors (rainfall influencing sugarcane crops and fire in the port of Santos) contributed to the price rises.

Beverages: Average prices of beverages changed 2.43% in October against September. Therefore, the cumulative index in 2013 reached 8.93%. In the comparison with October 2012, the latest prices became 7.87% more expensive. The indicators of October 2013 both for the cumulative of the year and for the cumulative in 12 months were the lowest in the respective series. In the case of the cumulative in 12 months, the latest result is lower than the other two ones that complete the series (2011's, 11.66%, and 2012's, 16.30%).

Petroleum refining and ethanol products: the activity registered a change of -0.13% in October in relation to September 2013, inverting the positive trend registered since July.  In the year, the sector accumulated till October a high of 4.13%. Comparing with the month/same month in the previous year, October recorded a change of 5.18%.

In terms of influence, the four products that weighed more in this indicator were responsible for -0.16 p.p., all of them negatively and related to petroleum refining, except for ethanol, which recorded a higher level than the previous month after two consecutive months of drops. Diesel fuel and other fuel oils and naphtha, as well as basic fuel oils, of the group petroleum refining, influenced the negative change of the sector as a whole.

Other chemicals: the chemical industry recorded in October -1.80% in relation to September - the first negative change after four consecutive months of rise in the prices of the sector.  In the cumulative index of the year, the sector registered 4.02%, whereas in the October 2013/October 2012 comparison the sector presented a high of 4.34%.

Four products from three distinct groups exerted more influence on the sector, all of them negatively. The highlights are manure and fertilizers, with NPK manure or fertilizers. Organic chemistry presents the products ethylene and propane, which, as basic petrochemicals, have a strong influence in the prices of naphtha, which, in its turn, registered its first month of negative change after three months of highs - a result influenced by the dollar rate variation. The intermediate fertilizers recorded the influence of the superphosphates.

Basic Metals: for the second month in a row, the basic metals sector posted a negative change of prices: -0.90% in relation to September 2013. It is worth mentioning that, of the three Octobers in the series stated in 2010, this year's is the highest, with a cumulative value up to this month of 6.26%. In relation to the last 12 months, the result was 7.06%.

The price recovery in the sector, even with the national production decreasing and the high international supply of iron, is mainly due to new tax rules (which were in force in the beginning of the year) coupled with a favorable exchange rate in 2013 (despite the dollar drawback in the last two months).