The Producer Price Index (IPP) changed 0.30% in December over the previous year. This result was higher than the rate seen in the comparison between November and October (0.27%).  The accumulated indicator of 2012 (in 12 months) reached 7.16%. This index was above the one accumulated in the previous 12 months (November), which reached 6.84%.

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 https://www.ibge.gov.br/home/estatistica/indicadores/precos/ipp/default.shtm.

16 of the 23 activities surveyed registered a rise in prices

In December 2012, 16 of the 23 activities registered positive price changes against 15 activities in the previous month. The four major changes came from toiletries, soaps and cleaning preparations (1.85%), tobacco (1.49%), paper an pulp (1.22%) and footwear and leather articles (-0.81%).

In terms of influence, in the comparison between December/12 and November/12 (0.30%), the highlights were food products (0.77 percentage points - p.p.), other chemical products (0.04 p.p.), basic metals (0.04 p.p.) and paper and pulp (0.04 p.p.).

The accumulated indicator of the year (December 2012 over December 2011) reached 7.16%, against 6.84% in November/12. Among the activities that registered the highest percentage changes concerning this indicator, the highlights were:  tobacco (18.52%), food products (14.57%), paper and pulp (12.57%) and beverages (12.00%).

In this indicator, the sectors exerting the major influence were: food products (2.75 p.p.), other chemical products (1.08 p.p.), petroleum refining and other alcohol products (0.71 p.p.) and paper and pulp (0.40 p.p.).

Eleven sectors had a higher influence in the IPP results between 2010 and 2012. Three of them (food products, petroleum refining and other alcohol products and other chemicals) stood out in those three years, with a significant weight in the calculation of the IPP (in December 2012, their contribution accounted for 42.22%) and whose price rises occurred in different circumstances. Food prices rose in 2010 due to the global demand, in a context of increased income. In 2012, besides the exchange rate devaluation, the uncertainty around soybean crops was one of the most significant factors.  

The prices of petroleum refining and alcohol products rose, both in 2010 and in 2012, due to diesel fuel and nafta (the latter influencing the world market, particularly in 2012), even though gasoline has pushed the sector’s results down.

The sector other chemical products found a fertile ground in 2010 to recover the prices that had reached a plateau in the wake of the 2008 crisis. More recently, the rise of nafta, one of the main raw materials in the sector, was one of the most relevant factors.

The other eight sectors have peculiar characteristics. In the textile industry, prices rose in 2010 because of the increase of cotton in the international market.  The paper and pulp sector was a highlight in 2010 and 2012. The rise in the international price of pulp, in 2010, and the devaluation of real in 2012 are the main reasons for that.

Food products: compared with November, food prices in December changed 0.37% on average.  Thus, the year 2012 closed with a change of 14.57%, above 2011’s result (3.08%) and below 2010’s (21.24%).  The year 2012 was characterized by the rise in the prices of soybean derivatives, which occurred mainly between March and September and was related to supply problems and to the exchange rate, since they are products aimed at the foreign market, both in Brazil and in the other producing countries.  Rice was also affected by supply problems and its prices rose practically throughout the whole year, with a highlight to the months of August and September. Conversely, crystallized sugar comes up as a negative highlight, a result of what happened throughout the year, with seven of the 12 negative price changes.

Beverages: the sector of beverages presented drops in prices for the second consecutive month. The average change of prices in the activity was of -0.64% in December/12 and -0.42% in November/12. These negative results, however, were not enough to remove the price rises the sector had in the year 2012, which presented the fourth larger change in the industry (12.0%).   The continuous price increase in the sector from March to October caused it to stand out among the greatest results in all indicators, both in terms of price change and of influence throughout the year.

Paper and pulp: In December the manufacture of paper and pulp recorded 1.22% in the comparison with November, the highest rate in the second semester of 2012. As a result, the accumulated of the year reached 12.57%, a higher index than that accumulated in the year 2011 (-7.80%), but lower than the one accumulated in 2010 (14.27%).  Compared to December 2009, the activity prices changed 18.60%.

Petroleum refining and alcohol products:  in December the activity of petroleum refining and alcohol products recorded 0.34% in relation to November, the lowest rate since March 2012 (0.36%).  The activity presented oscillation throughout 2012, with peaks in April (1.39%) and October (1.01%). Positive changes in 2012 outweighed the few negative rates in the beginning of the year (-0.58% in January and -0.2% in February), leading the accumulated of the year to 6.41%.

Other chemical products: the activity recorded a positive change of 0.39% in December in relation to November 2012, removing the -0,11% drop in the previous month.  In the year, the sector accumulated an increase of 9.98%, a higher result than 2011’s (8.34%), but lower than 2010’s (15.76%).

Basic metals: in December 2012, the activity recorded, for the second consecutive month, a positive change in comparison with the previous month (0.55%), which led the change in the year to 1.22%.