In February 2016, the prices of the overall industry changed, on average, -0.58% in relation to the previous month, a figure below that reported in January (0.68%). The cumulative index in the year stayed at 0.09% in February, against 0.68% in January. The cumulative index in 12 months stayed at 8.57%, against 9.99% in January. Among the 24 activities of the mining and quarrying and manufacturing industries, ten of them recorded positive price changes, against 18 in the previous month.

The Producer Price Index (IPP) of the Mining and Quarrying and Manufacturing Industries measures the evolution of the prices of products "at the factory gate", without taxes and freight. It includes information on the major economic categories, like capital goods, intermediate goods and consumer goods – durable, semi-durable and non-durable. The complete publication of the IPP can be accessed here.

Table 4
Producer Price Indexes, according to Mining and Quarrying and Manufacturing Industries (Overall Industry) and Major Economic Categories - Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria.

The four biggest changes in February 2016 were registered among products included in the following industrial activities: oil refining and ethanol products
(-3.06%), manufacture of wearing apparel and accessories (2.05%), beverages (-2.02%) and other chemicals (-1.85%). In terms of influence, the comparison between February 2016 and January 2016 (-0.58%) highlighted oil refining and ethanol products (-0.32 p.p.), other chemicals (-0.20 p.p.), food products (0.07 p.p.) and beverages
(-0.06 p.p.).

In February 2016, the cumulative indicator in the year (February 2016 against December 2015) hit 0.09%, against 0.68% in January 2016. Among the activities which, in February 2016, recorded the biggest percentage changes in this indicator, the highlights were: Mining and quarrying industries (-15.40%), fabricated metal products (5.34%), manufacture of wearing apparel and accessories (4.32%) and beverages (-3.66%). In this indicator, the most influent sectors were: Mining and quarrying industries (-0.42 p.p.), food products (0.39 p.p.), oil refining and ethanol products (-0.38 p.p.) and motor vehicles (0.22 p.p.).

Table 2
Producer Price Indexes, according to Industry Sections and Activities (%)

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria.

The price change between February 2016 and February 2015 was 8.57%, against 9.99% between January 2016 and January 2015. The four biggest price changes occurred in other transportation equipment (30.62%), tobacco (26.40%), mining and quarrying industries (-24.15%) and pulp and paper (18.07%). In this indicator, the sectors accounting for the main contributions were food products (3.00 p.p.), other chemicals (1.55 p.p.), mining and quarrying industries (-0.81 p.p.) and motor vehicles (0.69 p.p.).

In February 2016, the price change of -0.58% against January reflected in the Major Economic Categories like this: -0.40% in capital goods; -1.38% in intermediate goods; and 0.67% in consumer goods, being 0.50% in durable consumer goods and 0.72% in semi and non-durable consumer goods. The influence of the Major Economic Categories were: -0.04 p.p. of capital goods, -0.78 p.p. of intermediate goods and 0.23 p.p. of consumer goods. In the case of consumer goods, 0.19 p.p. was due to price changes observed in semi and non-durable consumer goods and 0.04 p.p. in the durable consumer goods.

10 of 24 activities registered positive price changes

Among the 24 activities of the mining and quarrying and manufacturing industries, ten of them recorded positive price changes, against 18 in the previous month. Some sectors were highlighted below:

Mining and quarrying: the mining and quarrying industries maintained the downward trend of prices in February for the fourth month in a row, posting a change of -1.13% in relation to January. In module terms, this sector registered the highest cumulative change in the year (-15.40%), above those reported by the other activities surveyed. The negative change of the prices in this sector exerted the highest influence (-0.42 p.p.) on the overall industry in 2016.

Compared with February 2015 (M/M_-12), the prices of the mining activities dropped 24.15% and recorded the highest negative change in the whole industry. The influence of the price change of this activity on the indicator (M/M_-12) of the overall industry was -0.81 p.p.

Food products: the price change between January and February was 0.33%, the lowest rate since June 2015 (0.13%). Considering this price increase, the positive cumulative change reached 1.95%. Compared with February 2015, the change was 15.67%. In terms of influence, this sector emerges as the major positive influence in the three indicators assessed: M/M_-1, 0.07 p.p. in -0.58% (manufacturing and mining and quarrying industries); cumulative, 0.39 p.p. in 0.09% (overall industry); and M/M_-12, 3.00 p.p. in 8.57% (overall industry).

Of the four products that mostly influenced the M/M_-1 – responsible for 0.04 p.p. (in 0.33%) – "sterilized milk/UHT/long life milk" and “demerara sugar, including VHP sugar” were among the four biggest changes. The other highlights in terms of influence were "residue of soybean oil extraction" – the only negative influence, associated with the beginning of the soybean harvest – and "crystallized sugar". The positive change of sugar was associated with the sugarcane off-season period. Regardless of being the harvest period of milk, the output was lower between 2015 and 2016 according to Cepea, which later affected the dairy industry.

A general note should be made concerning soybean products. Except for "residue of soybean oil extraction" – which negatively influenced the cumulative indicator –, the influences were positive on the longer-term indicators, which was not the case of M/M_-1 – except for "refined soybean oil", whose influence was positive.

Beverages: the average drop of the prices in February 2016 was about 2.02%, adding up to a cumulative drop of 3.66% since January 2016. Nevertheless, the index of this sector registered a cumulative increase of 5.29% in relation to February 2015. This was the fourth consecutive drop in the producer prices of this sector, which rose 9.57% in October 2015. The negative change in the producer prices was partly due to the reduction in the consumption (lower domestic demand).

Oil refining and ethanol products: the result of -3.06%, recorded in the price comparison between February and January 2016, was the highest negative change reported in the whole time series. Considering this rate, the cumulative figure in the year hit -3.63%, the highest negative value ever reported in February along the time series. The cumulative index in February 2015 was also negative (-2.44%), the second highest negative rate. In terms of M/M_-12, the change was positive: 4.02%.

Among the products that mostly influenced the M/M_-1 index, three of them were from petroleum – "diesel fuel and other fuel oils", "naphtha" and "aviation kerosene" –, all of them influencing negatively. The positive influence of "ethyl alcohol (anhydrous or hydrated)" was compatible with the off-season period of sugarcane. These four products contributed with -2.93 p.p. (in -3.06%).

In the longer-term indicators, petroleum products positively contributed only in the M/M_-12 comparison – not all of them, since "diesel fuel and other fuel oils" impacted negatively –, whereas "ethyl alcohol (anhydrous or hydrated)" positively influenced both the M/M_-12 and the cumulative indexes, in line with what has been said in the survey analyses over time, i.e., with the increase in the price of gasoline – which increases the demand for ethanol – and now with the off-season period of sugarcane.

Other chemicals: the chemical industry posted a negative change of 1.85% in February, leading to a cumulative change in the year of -1.66% and of 15.70% in 12 months – the highest change in this type of comparison since July 2011.

It should be highlighted that the major changes, all of them negative, took place in products that did not show the highest weights, which was not the case of those with the biggest influence, where two of the highlighted products were in this category: unsaturated ethylene (ethene)" and "polypropylene (PP)". "Ammonium sulphate or urea" and "HDPE" followed this group with sufficient negative price change to rank them among those that mostly influenced the results in relation to the immediately previous month.

Ammonia is the main input for nitrogen-based fertilizers and the prices of this product had been dropping over the last months, being one of the highlights of the negative change in February, which partly explained the cumulative figures in the year of "NPK-based manure and fertilizers".

Basic and intermediate petrochemicals for plasticizers, resins and fibers were associated with international prices, costs of electricity, acquisition of imported raw materials, dollar value – depreciation of real against the American currency of 41.1% in 12 months – and naphtha prices, whose prices dropped between October 2015 and February 2016, which also partly explained the reduction in the prices last month.                                                                        

The four products that mostly influenced the month-over-month comparison in February accounted for -1.19 p.p. in the result of -1.85%. In other words, the other 28 products contributed with 0.66 p.p.

Motor vehicles: After registering the highest change in the time series – 2.13% in January 2016 –, the product prices in this sector declined by 0.04% compared with the previous month. As a result, the cumulative rate retreated from 2.13% to 2.09% and, compared with the same month in 2015, the rate changed from 7.14% to 6.24%.

Of the four products that stood out in terms of influence, only "gearbox for motor vehicles" impacted positively. However, its influence was not sufficient to offset that of other products – "tractor-truck for trailers and semi-trailers", "engine parts for motor vehicles" and "gasoline and ethanol goods vehicles with load capacity below 5t". The four products influenced -0.15 p.p. (in -0.04%). Among these products, "tractor-truck for trailers and semi-trailers" – the only one that also appeared among those with the highest price changes – and "engine parts for motor vehicles" were among those with the highest weights.