In January 2014, the Producer Price Index (IPP) changed 1.50% in comparison with the December 2013 figure, a result above that of the comparison between December 2013 and November 2013 (0.60%). It is the second biggest positive change in the series (except for May 2012, 1.69%). IPP records cumulative increase of 7.38% in 12 months.

IPP measures the evolution of “factory gate” prices, excluded taxes or freight, for 23 manufacturing industry sectors. The complete publication is available at https://www.ibge.gov.br/english/estatistica/indicadores/precos/ipp/default.shtm.

19 of the 23 activities surveyed recorded prices rises

In January 2014, 19 of the 23 activities surveyed recorded positive changes of price over those in December, versus 15 in the previous month. The four biggest changes were those of products belonging to the activities of oil refining and ethanol products (4.51%), basic metals (4.26%), furniture (3.16%) and tobacco (3.14%). The most influential items were oil refining and ethanol products (0.50 percentage points), basic metals (0.33 percentage points), food products (-0.25 percentage points) and other chemicals (0.23 percentage points).

In the comparison between January 2014 and January 2013 (cumulative indicator in 12 months), there was change of 7.38%, versus 5.69% in December. The four main prices changes were those of tobacco (16.97%), footwear and leather articles (12.90%), pulp and paper (12.04%) and oil refining and ethanol production (11.68%). The main contributions came from food products (1.41 percentage points), oil refining and etanol products (1.28 percentage points), other chemical products (0.77 percentage points) and basic metals (0.71 percentage points).

Food products: in January 2014, the prices of food products fell, on the average, 1.25%, the first negative rate since October 2013 (-0.78%). As observed since 2012, the January data relative to the food products series have been negative (-0.09% in 2012 and -1.52% in 2013). Despite the decrease observed, the prices were 7.10% higher in January 2014 than in 2013. Among the highlights in terms of change and influence, residue from soybean extraction was the only item to appear in the two groups. Among the changes, together with soybean derivatives are: tomato pulp, paste and purée, chocolate candies and bars with cacao, and ice creams, popsicles and edible refrigerated products. The pressure resulting from the rise of raw material concerning the first two products in the list and the high summer temperatures account for the rise of ice cream prices. In terms of influence, all changes were negative and came from residue of soybean extraction, crystallized sugar, sterilized milk / UHT / carton milk and frozen or refrigerated beef. The price decline of the most relevant products to the January 2014 results were based on the bigger supply due to "harvests" (soybean and milk), a lower demand (beef) and finally, in the case of crystallized sugar, of a bigger incentive to ethanol production from sugarcane. The four most influential products accounted, together, for -1.41 percentage points. (out of -1.25%).

Oil refining and ethanol products: the activity recorded change of 4.51% in January, the biggest in the time series of the sector, which started in January 2010. This result follows the upward trend observed in the previous month, 2.93%. Considering the overall composition of manufacturing industry, the sector had participation of 0.50 percentage points, out of a total 1.50% of all manufacturing activities. This result caused the cumulative index of the sector to rise 11.68%, and reach the fourth position, in terms of positive changes, among all the 23 subsectors covered by IPP. The highlights in terms of the monthly indicator - diesel and other fuel oils , naphthas, kerosene and ethyl alcohol (anhydrous or hydrated) - all with positive changes, accounted for 4.52 percentage points of the indicator of the sector (4.51%). The change of the aforementioned products occurred mainly due to the upward trend of fuel prices. Naphthas, also rising in international markets, together with the appreciation of dollar in January, also led to the positive indexes registered by the sector.

Other chemicals: chemical industry registered 2.09% of positive change in the January 2014 indicator versus that of December 2013, starting the year with similar results nas those of the end of 2013, when there was 2.37% of change in comparison with November. The indicator for the last 12 months, after deceleration from October to November, once again pointed to an upward trend in December and in January, when there was positive change of 6.88% versus January 2013. In terms of January versus December figures, the four highlights were unsaturated ethylene (ethene), unsaturated propene (polypropylene, PP) and ammonium sulphate or urea. The four highlights accounted for 0.86 percentage points out of 2.09% from chemical industry.

Basic metals: The result of January 2014 was 4.26% positive, representing the biggest change since the beginning of the series, in 2010. That also led the cumulative change in 12 months to reach 9.22%, the most significant IPP result for this sector since the beginning of the survey. In December, the four products with the biggest price changes had results related to the steel industry, one relative to the production of semi-finished steel items (carbon-steel ingots, blocks, rods or plates) and three related to the production of laminated steel boards (uncoated hot-rolled coils; tin plates and thick uncoated carbon steel plates) being only one item from the group of non-ferrous metals. Among these products, "thick uncoated carbon steel plates" and "tin plates" are not among the four most important products in the month, having been replaced by "uncoated cold-rolled coil" and by "non-allow unwrought aluminum". Also in terms of participation in the month, the four main products accounted for a contribution of 3.01 percentage points, that is, 18 products of this activity accounted for 1.15 percentage points in January, even considering the exceeding supply of steel, due to favorable prices throughout the last 12 months (17.3%) and the expansion towards new markets. It is also important to highlight that the industry of non-iron metals recorded average positive price changes, in accordance with the results of the London Stock Market.

Motor vehicles: the prices of motor vehicles increased on average 1.33% in comparison with those charged in December. This is the highest figure recorded in the time series, which started in January 2010. In relation to the last twelve months, the activity recorded change of 3.28%, a figure which is close to those of November and December 2013 (3.44% and 2.81%, respectively). The products with biggest participation in the monthly index were diesel trucks for more than 5 tonnes, passenger cars, gasoline, alcohol or biofuels, for any engine, tractor trucks for trailers and semi-trailers and gear boxes for motor vehicles. All of them recorded positive changes, amounting to 0.96 percentage points of the January result. With reference to the cumulative index in 12 months, the highlights were passenger cars, gasoline, alcohol or biofuels, for any engine, pieces for motor vehicle engines, tractor-trucks for trailers and semi-trailers , and chassis with engine for buses or trucks. All of these items also recorded positive results.