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Producer Price Index (IPP) is 1.31% in June

July 28, 2021 09h00 AM | Last Updated: July 29, 2021 03h19 PM

In June 2021, industrial prices increased 1.31% over May. The cumulative index in the year hit 19.11%, the highest one for June in the time series started in 2014. The cumulative index in 12 months was also a record, hitting 36.81%.

Of the 24 activities, 18 increased their prices in June against 17 in the previous month.

The Producer Price Index - IPP of the Mining and Manufacturing Industries measures the evolution of the prices of products "at the factory gate", free from taxes and freight, and encompasses information by major economic category, i.e., capital goods, intermediate goods and consumer goods (durable and semi and non-durable).

Period Rate (%)
June 2021 1.31
May 2021 0.99
Cumulative in the year 19.11
Cumulative in 12 months 36.81
June 2020 0.60

In June 2021, industrial prices increased 1.31% over May, surpassing the change between May and April (0.99%). The four biggest changes were in the activities of mining and quarrying industries (8.71%), fabricated metal products (2.80%), electrical machinery and apparatus (2.60%) and non-metallic mineral products (2.50%). The biggest influence on the index came from mining and quarrying industries, which represented 0.60 percentage points, followed by other chemicals (0.19 p.p.), fabricated metal products (0.08 p.p.) and electrical machinery and apparatus (0.07 p.p.).

Producer Price Index, according to Mining and Manufacturing Industries (Overall Industry) and Sections - Last three months
Overall Industry and Sections Changes (%)
M/M-1 Cumulative Year M/M-12
APR/21 MAY/21 JUN/21 APR/21 MAY/21 JUN/21 APR/21 MAY/21 JUN/21
Overall Industry 2.19 0.99 1.31 16.42 17.56 19.11 36.09 35.85 36.81
B - Mining and Quarrying Industries -0.70 -0.43 8.71 48.52 47.88 60.76 125.48 105.71 115.55
C - Manufacturing Industries 2.42 1.09 0.76 14.55 15.80 16.68 32.13 32.50 32.92
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria 

The cumulative index in the year hit 19.11% against 17.56% in May 2021 and it was a record in the time series for those accrued until June. Among the activities with the highest changes were: mining and quarrying industries (60.76%), oil refining and ethanol products (39.68%), other chemicals (33.00%) and basic metals (32.17%). The sectors that mostly influenced this indicator were: oil refining and ethanol products (3.34 p.p.), mining and quarrying industries (3.34 p.p.), other chemicals (2.64 p.p.) and food products (2.21 p.p.).

The cumulative index in 12 months was 36.81% against 35.85% in the previous month. The four biggest changes were in mining and quarrying industries (115.55%), oil refining and ethanol products (76.64%), basic metals (55.25%) and  other chemicals (53.89%). On the other hand, the most influential sectors were: food (7.60 p.p.), oil refining and ethanol products (5.87 p.p.), mining and quarrying industries (5.44 p.p.) and other chemicals (4.29 p.p.).

The change of 1.31% over May reflected in the major economic categories in the following way: 0.71% in capital goods; 1.56% in intermediate goods; and 1.01% in consumer goods, being 2.03% the change noticed in durable consumer goods and 0.81% in semi and non-durable consumer goods.

The influence of the economic categories over the month´s result was: 0.05 p.p. of capital goods, 0.92 p.p. of intermediate goods and 0.35 p.p. of consumer goods. In the case of consumer goods, 0.11 p.p. was due to price changes observed in durable consumer goods and 0.23 p.p. in semi and non-durable consumer goods.

In the cumulative index in the year (19.11%), capital goods changed 9.27% (with influence of 0.67 p.p.), intermediate goods changed 26.01% (14.49 p.p.) and consumer goods, 10.65% (3.94 p.p.). In this last case, the result was influenced by durable consumer goods (0.56 p.p.) and by semi and non-durable consumer goods (3.38 p.p.).

Producer Price Indexes, according to Mining and Manufacturing Industries (Overall Industry) and Major Economic Categories - Last three months
Overall Industry and Sections Changes (%)
M/M-1 Cumulative Year M/M-12
APR/21 MAY/21 JUN/21 APR/21 MAY/21 JUN/21 APR/21 MAY/21 JUN/21
Overall Industry 2.19 0.99 1.31 16.42 17.56 19.11 36.09 35.85 36.81
Capital Goods (BK) 1.13 -0.08 0.71 8.59 8.50 9.27 16.91 13.17 16.03
Intermediate Goods (BI) 2.67 0.92 1.56 22.95 24.08 26.01 46.82 46.69 49.46
Consumer Goods (BC) 1.59 1.32 1.01 8.12 9.55 10.65 24.54 24.98 23.22
Durable consumer goods (BCD) 1.40 1.13 2.03 5.68 6.87 9.04 14.89 14.29 15.74
Semi and non-durable consumer goods (BCND) 1.63 1.35 0.81 8.61 10.08 10.97 26.62 27.30  24.81
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria 

In the June 2021/June 2020 comparison, the industrial prices rose 36.81%, with the following changes: capital goods, 16.03% (1.26 p.p.); intermediate goods, 49.46% (26.68 p.p.); and consumer goods, 23.22% (8.87%), being the influence of durable consumer goods of 1.05 p.p. and that of semi and non-durable consumer goods, of 7.82 p.p.

Mining and quarrying industries: after two consecutive months of negative changes in the month against immediately previous month comparison, the prices in the sector changed, on average, 8.71%. As a result, the cumulative index in the year moved from 47.88% in May to 60.76% in June. On its turn, the cumulative index in 12 months also accelerated between May and June - from 105.71% to 115.55% -, but never reaching the March´s (136.25%) and April´s (125.48%) results. Despite the valuation of the real, the prices of petroleum and mining products followed the rises of the foreign market.

The sector registered the most intense change in the three perspectives of analysis and exerted the biggest influence over the previous month (0.60 p.p. in 1.31%), the second biggest in the cumulative index in the year (3.34 p.p. in 19.11%) and the third biggest in the cumulative index in 12 months (5.44 p.p. in 36.81%).

Food: compared with May, the prices in this sector changed, on average, -0.55%, the first negative figure since December 2020 (-1.05%). As a result, the cumulative indicator in the year retreated, changing from 8.65% in May to 8.60%. However, the cumulative index in 12 months changed 31.08%, more than in the previous month (30.18%), remaining above 30%, as it has been since September 2020 (32.51%). This sector exerted the fourth biggest influence on the cumulative index in the year (2.21 p.p. in 19.11%) and the biggest on the cumulative rate in 12 months (7.60 p.p. in 36.81%).

Still comparing with May, all the highlighted products use milk as raw material. With the drought in Brazil, the acquisition in the dairy belts has been limited, causing the rise in the prices of the product and influencing the subsequent industrial chain. Despite that increase, two products - “VHP sugar (very high polarization)” and “residue of soybean oil extraction” - stood out among the influences, whose negative change caused the influence of the four highlighted products had been -0.52 p.p. in -0.05%.

The drop in the prices of these two products was in line with the valuation of the real (4.9% over May; 2.2% in the cumulative index in the year; and 3.2% in the last 12 months), though they also suffered foreign influences with the arrival of the Argentine soybean in the international market.

The influence in the long-term perspectives, reason why this sector stood out in the analysis, was clearly positive in the four most influential products, both in the cumulative indicator in the year and in the cumulative index in 12 months, being fresh and cooled beef, frozen poultry and giblets and crude soybean oil more common. VHP sugar stood out in the cumulative index in the year and residue of soybean oil extraction, in the last 12 months.

Oil refining and ethanol products: compared with May, the June prices changed, on average, 0.18%. As a result, the cumulative indicator in the year reached 39.68% and in the last 12 months, 76.64%. In this case, it reduced in relation to the previous month (106.57%), even recording the third highest change in that perspective. The reason why this sector stood out was due to the long-term results. In terms of change, it was the second one both in the cumulative indicator in the year and in the last 12 months. In terms of influence, it was the first one in the cumulative index in the year (3.34 p.p. in 19.11%) and the second one in the cumulative index in 12 months (5.87 p.p. in 36.81%).

Other chemicals: by registering 2.16% in June, the chemical industry resumed a positive average change of prices, after the reduction occurred in May (-0.47%), accruing a change of 33.00% in the year and of 53.89% in the last 12 months, which were the highest cumulative indexes in the entire time series of the survey for this activity.

The results were mainly linked with international prices and with the price change of a number of raw materials either imported or not, like, for example, naphtha. Nevertheless, the biggest contributors to the increase this month were concentrated in the group of “manufacture of inorganic chemicals”, more specifically in fertilizers. The price change in this group was 9.33% in the month, accruing a change of 44.81% in the year and of 56.11% in the last 12 months. This sector stood out in the comparison with the 24 activities of the survey, for having the third highest price change in the cumulative index in the year and the fourth one in the cumulative index in 12 months. Concerning the influence on the result, it was the second biggest in the month, the third one in the cumulative rate in the year and the fourth one in the cumulative index in 12 months.

Fabricated metal products: this sector recorded an average increase in the prices of 2.80% between May and June, being the second highest change noticed this month among all the sectors of the mining and manufacturing industries surveyed, besides showing the third biggest influence on the industry against May (0.08 p.p. in 1.31%).

As it is happening since the beginning of the year, the increase in June was caused, to a great extent, by the higher prices of the raw materials used in the sector, especially steel.

With the June´s result, this sector accrued a change of 24.53% in 2021, the highest figure in the time series for a cumulative index in the first semester of the year. And in the last 12 months, when we compare June 2021 with June 2020, this sector accrued the highest figure in the time series: 36.41%.

Electrical machinery and apparatus: in June, the prices of this sector rose 2.60% over May. As a result, this activity registered a positive change in this comparison in all months of the year. The June´s result was due, above all, to the higher prices of “refrigerators or freezers for domestic use”, “electric engines” and “DC generators of other types”, considering that the first two were among the products with the highest weight in the activity.

Among the products with the biggest influence on the sector, only “liquid dielectric transformers” followed the reverse way and negatively impacted the change over May. The influence of these four products that mostly impacted the monthly change was of 1.80 p.p., i.e., the other 17 products of this activity contributed with 0.80 p.p.

With the June´s change, the cumulative rate in the year hit 13.92%, the highest one noticed in a first semester of this sector in the entire time series, started in 2010. And the indicator of the last 12 months (M/M-12) hit 26.58%, also the highest figure of this indicator in the time series.