In July of 2012, the Producer Price Index (IPP) changed 0.54% compared with June, when the index was 1.11%. When compared with the same month a year ago (accumulated in 12 months), prices changed 7.19% in July and 6.64% in June. Conversely, the accumulated change in 2011 was of 5.08% in July and of 4.51% in the previous month.

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.

16 of the 23 activities surveyed registered a rise in prices

In July 2012, 16 of the 23 activities surveyed registered a rise in prices, against 19 in the previous month. The highest increases recorded in July, in relation to June, were among the products of the industrial activities of food (3.17%), other chemical products (-2.62%), rubber and plastic (1.34%) and beverages (1.29%).

The items to exert the greatest influence, or impact, up or down, on the change of July against June (0.54%) were food products (0.62 p.p.), other chemical products (-0.29 p.p.), basic metals (-0.10 p.p.) and motor vehicles (0.09 p.p.).

The accumulated indicator of 2012 reached 5.08% in July against 4.51% in June. Among the activities which in July/2012, had the greatest percentage changes in this comparison, the highlights were tobacco (16.40%), food products (12.16%), paper and pulp (10.39%) and other transportation equipment (7.71%).

Concerning the accumulated indicator of the year, the major influential sectors were: food products (2.29 p.p.), other chemical products (0.38 p.p.), petroleum refinement and other alcohol products (0.33 p.p.) and paper and pulp (0.33 p.p.).

When compared with the same month of 2011 (accumulated in 12 months), prices rose 7.19% in July, against 6.64% in June. The four major price changes came from tobacco (30.70%); food products (19.72%), other transportation equipment (17.98%) and beverages (14.64%).

The major influences, in the comparison of July against the same month a year ago came from food products (3.55 p.p.); other chemical products (0.54 p.p.); petroleum refinement and alcohol products (0.43 p.p.) and motor vehicles (0.41 p.p.). 

Food products: In July 2012, in relation to June 2012, the prices of the sector grew, in average, 3.17%. As a result, the accumulated of the year reaches a positive change of 12.16%.  In the comparison with July of 2011, prices rose 19.72%, which is the highest rate since January 2011 (19.85%). In relation to this series (M/M_-12), from January 2011 to February 2012, the rates were progressively decreasing, hitting, this last month, 1.25%. Therefore, a new inflection in the series occurred starting in February 2012, with a leap from 3.42% to the current 19.72%.

Beverages: the result in the sector of beverages shows that the rise of the price levels presented since March/12 was kept in the month of July/12 (1.29%). This result contributed for the sector to present this month, in comparison with the other activities, the fourth highest change both for the M/M_-1 and the M/M_-12 results. Nevertheless, a pace reduction of the rise occurred this month in comparison with the previous month. The M/M_-12 indicator presented a slight reduction in comparison with the previous month:  14.64%, in July/12, against 15.37% in June/12. It is the second highest result of the last 12 months. Conversely, the accumulated index of the year was 6.58%.

Tobacco: the prices in the tobacco sector posted an increase of 0.39% compared to the previous month. This indicator result is mainly due to the dollar rise of approximately 0.54% in relation to the real during the month.  The exchange rate exerts a great influence in the index due to the importance of the exports in the sector, particularly of “processed tobacco”; but it is also important to consider the climate factors which hampered the production causing a rise in the prices in the previous months and the government regulation, which established a minimum price for cigarettes, a measure which influences mainly the accumulated and M/M_-12 indicators. In the M/M_-12 indicator, in July, there was a positive change of 30.70%, which, at a great extent, is attributable to the exchange rate performance – the dollar, in the comparison July 2012/July 2011, rose approximately 31.71%.  In the accumulated of 2012, the change was of 16.40%, influenced by the factors aforementioned.

Paper and pulp: A change of 0.74%, in July/2012 was recorded, against 2.06%, in June/2012. As a result, in the accumulated of the year, the indicator reached 10.39%, in July/2012, against 9.57%, in June/2012. In the case of the M/M₁₂, 5.64% was the change of July/2012, against 5.51% in June/2012. Finally, in the index-number series, the sector had prices 16.3% higher than in July 2012 in relation to December 2009, a bigger result than the one seen in June/2012 (15.44%).

Petroleum refinement and alcohol products:  the activity “petroleum refinement and alcohol products” posted a rise of 0.70% in July in relation to June, keeping the upward trend started last month.  In the year, the sector accumulated an increase of 3.03%. As compared to the month / the same month a year ago indicator, July records a result of 3.89%.

Other chemical products: the chemical industry posted in July a fall of 2.62% in relation to June 2012. It was the first negative result of the sector after a period of two rises in a row. In the year, the sector recorded a positive change of 3.55% and in the comparison between July 2012/ July 2011, an increase of 4.95%.