In July 2021, industry prices rose 1.94% from June (1.29%), biggest change in the last three months (after 1.29% in June and 0.99% in May). The cumulative index in the year was 21.39%, biggest figure in July in this time series which, in seven months, has reached a figure above that of 2020 (19,38%).

The cumulative index in 12 months (35.08%) is among the four biggest in the series that started in December 2014. In July, prices rose in 20 of the 24 activities surveyed.

The Producer Price Index (IPP) of Mining and Quarrying and Manufacturing Industries measures the change in "factory-gate prices", free of taxes or freight, of major economic activities: capital goods, intermediate goods and consumer goods (durable, semi-durable and non-durable).

In July 2021, industry prices rose 1.94% from June. The four biggest changes were in basic metals (3.68%), mining and quarrying industries (3.61%), wearing apparel (3.45%) and oil refining and ethanol products (3.26%). The biggest influences were food products (0.49 p.p.), oil refining and ethanol products (0.32 p.p.), mining and quarrying industries (0.27 p.p.) and basic metals (0.27 p.p.).

The cumulative index in the year (21.39%) against that of June 2021 (19;08%) was the highest for a month of July in this time series and exceeded the cumulative in the entire year of 2020 (19.38%). Among the activities with the highest changes were: mining and quarrying industries (66.56%), oil refining and ethanol products (44.27%), basic metals (37.04%) and other chemicals (33.54%). The sectors that influenced this indicator tehe most were: oil refining and ethanol products (3.73 p.p.), mining and quarrying industries (3.66 p.p.), food products (2.77 p.p.) and other chemicals (2.69 p.p.).

The cumulative index in 12 months was 35.08%, against 36.78% in June/2021. The four biggest changes were in mining and quarrying industries (95.12%), oil refining and ethanol products (63.41%), basic metals (57.49%) and other chemicals (52.38%). On the other hand, the most influential sectors were: food products (7.12 p.p.), oil refining and ethanol products (5.25 p.p.), mining and quarrying industries (4.97 p.p.) and other chemicals (4.09 p.p.).

The change of 1.94% from May reflected in the major economic categories in the following way: capital goods, 2.14%; intermediate goods, 1.90%; and consumer goods, 1.98%, with 0.76% being the change observed in durable consumer goods and 2.22% in semi and non-durable consumer goods.

The influence of the economic categories on the month’s result was: capital goods, 0.14 p.p; intermediate goods, 1.12 p.p and consumer goods, 0.68 p.p. In the case of consumer goods, 0.04 p.p. was due to price changes of durable consumer goods and 0.64 p.p. of semi and non-durable consumer goods.

The cumulative index in the year, 14.09%, recorded achange of 21.39%, with 11.72% from capital goods (influence of 0.85 p.p.), 28.31% from intermediate goods (15.77 p.p.) and 12.88% from consumer goods (4.77 p.p.). Consumer goods awas composed of 0.60 p.p. from durable consumer goods and 4.17 p.p. from semi-and non-durable consumer goods.

From July 2020, prices rose 35.08%, with the following changes: capital goods, 17.06% (1.32 p.p.); intermediate goods, 46.11% (25.10 p.p.); and consumer goods, 22.90% (8.67%), being the influence of durable consumer goods of 1.00 p.p. and that of semi and non-durable consumer goods, of 7.66 p.p.

Mining and quarrying industries: : in July, prices of the sector chnged by 3.61%, with a cumulative change of 66.56% in the year - the biggest cumulative figure for a month of July, and also for any other month in the year. In the cumulative index in 12 months, the change of 95.12% is the fifth in the series, lower than in that of immediately previous months (136.25%, in March; 125.48%, in April; 105.71%, in May; and 115.55%, in June).

The sector stands out with the biggest cumulative change in the year and cumulative change in 12 months, and the second biggest against the previous month. Innterms of influence, on the other hand, it was rhe third against the previous month (0.27 p.p, in 1.94%) and against the same month a year ago (4.97 p.p, in 35.08% and the second cumulative figure in the year (3.66 p.p, in 21.39%).

Food products: in July, after a decrease observed from may to June, -0.14%, price change in the sector was positive again, 2.09% from June, the highest figure since April (2.66%). The cumulative index in July was 10.77%, the third biggest one in a month of July in the time series (after 12.09% in July 2012 and 11.95% in July 2020) and, in terms of the cumulative index in 12 months, 29.02%, which is the lowest observed in June, 30.96%.

This sector stood out due as it accounts for the biggest contribution to the index (23.45%), being the main influence to tne monthly change (0.49 p.p, of 1.94%) and in the cumulative index in 12 months (7.12 p.p of 35.08%) and the third in the cumulative index in the year (2.77 p.p in 21.39%).

In terms of influence, the price changes of the four products (1.61 p.p in 2.09%) were influenced by a series of factors. One of them is the 2.5% depreciation of the real against the dollar from June to July. It is also worth mentioning some other facts. The effect on the price of “VHP sugar” is in line with the period between harvests, made worse due to the harsh winter in 2021. A bigger domestic demand (an effect of the replacement of animal protein in place of pork and beef) and the increase of costs account for the change of chicken prices.

The prices of “margarine” accounted for a high domestic demand, which is also related to the effect of replacement of butter, a dairy product whose price rose in previous months, a lot because of the period between harvests. In the case of “frozen beef” it is worth mentioning the relatively low offer of slaughter, and the foreign demand upturn, mainly in the case of China.

Among groups in this sector both in the July/June comparison, and in terms of the cumulative index in the year, those whose prices changed above the average of the sector (2.09%, M/M-1; and 10.77%, cumulative in the year) were “slaughter and manufacture of meat products” (2.82% and 11.62%, respectively), “manufacture and refining of sugar” (3.53% and 17.34%) and “"coffee roasting and grinding” (5.26% and 18.02%).

It is worth pointing out that prices of coffee were influenced by currency and, also, due to the harsh winter, with frosts in areas of important production. Against July 2020, the groups whose prices rose above the average for the sector (29.02%) were “slaughter and manufacture of meat products” (32.74%) and “manufacture of vegetable and animal fats and oils” (48.47%).

Wearing apparel and accessories: manufacture of wearing apparel and accessories accounted for the third biggest monthly change in the monthly index of July, 3.45%. This is the third biggest figure in this activity since the beginning of the time series (January 2010), second to the figure of February 2015 (4.11%) and January 2018 (4.07%).

Among the main reasons for the increase can be mentioned the change in costs for the acquiaition of raw material and production costs. As a result, the cumulative index in the year in July rose to 12.78%. The cumulative index in the year reached 16.38%.

The activity accounted for a contribution of 0.05 percentage points to the monthly index and 0.27 percentage points in the last 12 months. In terms of the cumulative index in 12 months, it accounted for 0.19 percentage points.

Oil refining and ethanol products: for the third consecutive month, the month-on-month comparison remained positive, and the 3.26% of July was the biggest change since March, 16.68%. As a result, the cumulative index in the year, the biggest in the series for the same month was 44.27%. For the sake of comparison, the average price change for the cumulative in the year, from July 2010 to 2020, was 1.27%. In terms of the cumulative index in 12 months, the change was 63.41%, a result below that of April (91.25%), May (106.57%) and June (76.68%).

The highlight given to the sector was due to the factor it is among the main changes (the fourth change in the monthly comparison and the second in the cumulative in the year and cumulative in 12 months) and among the main influences. In this case, it was the second in the monthly indicator (0.32 p.p., of 1.94%) and in the cumulative index in 12 months (5.25 p.p., of 35.08%) and the first in the cumulative index in the year (3.73 p.p., and, 21.39%).

Other chemicals: in July, chemical industry recorded a price change of 0.40%, the lowest positive rate in the year, with a cumulative change of 33.54% in the year and 52.38% in the last 12 months. These 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 7.17% in the month, accruing a change of 55.22% in the year and of64.96% in the last 12 months, biggest cumulative results in the series.

Manufacture of resins and elastomers fell 6.35%, third monthly decrease in a row, despite its 32.47% cumulative in the year and 85.88% cumulative in the last 12 months.

Finally, in the group “manufacure of pesticides and household disinfectants”, the result was 0.66% in the month, a cumulative 9.95% in the year and a cumulative figure of 10.95% in 12 months.

As for the four most influential products to the reusult (1.40% out of 0.40%), there was a price rise for “NPK manure or fertilizers” and “mineral of chemical phosphate manure or fertilizers” On the other hand, other two products recorded negative price changes and represent resins and elastomers: “vinyl polychloride” and “linear polyethylene with density below 0.94” The other 35 products surveyed in this activity also had, on the average, a negative result with -1.00 p.p of the final change of the activity.

This sector stood out in the comparison with the 24 activities of the survey, for having the fourth biggest price change in the cumulative index in the year and the fourth one in the cumulative index in 12 months.

Basic metals: the comparison of prices in June and July showed a positive change of 3.68%, 13th positive one in a row in this activity. With this result, the sector of basic metals had a cumulative change of 37.04% in the year and 57.49%, in the last 12 months, the highest in IPP, since its start in January 2010.

Between December 2018 (base for the current sample) and July 2021, prices of the sector had a cumulative increase of 81.03%, only second to the cumulative increase of mining and quarrying industry, 175.77%, actiity that includes iron ore, main raw material for steel.

Considering the economic groups in this activity, steel industry recorded a change of 4.14%, thus resulting in a cumulative index of 53.19% in the year and of 86.29% in 12 months. Then three figures are above the average for the activity.

The four products accounting for the main influence on the month represented 2.86 p.p of 3.68%, with 0.82 p.p for the other 20 products analyzed.

This sector of basic metals stood out in comparison with the 24 activities of the survey, for having the biggest price change in the month and the third cumulative index in the year and in 12 months, besides being the fourth biggest influence on the month’s result.