The industrial prices changed -0.35% in April 2023 against March, the third negative figure in a row. In this same comparison, 12 out of 24 industrial activities dropped their prices.

The cumulative index in the year stayed at -0.99%, the second lowest for April since the beginning of the time series in 2014. The cumulative rate in 12 months stayed at -4.63%, the biggest drop in the time series for this indicator.

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 the major economic categories.

Among the activities surveyed, the four most intense changes were: pharmaceuticals (3.97%), pulp and paper (-3.57%), wood (-3.19%) and other chemicals (-2.61%). In the monthly comparison, other chemicals was the most relevant sector of industry in the composition of the aggregate result. This activity was responsible for -0.22 percentage points (p.p) of influence on the change of -0.35% in general industry.

Other activities that stood out were petroleum refining and biofuels, with -0.18 p.p. of influence, pulp and paper (-0.11 p.p.) and pharmaceuticals (0.10 p.p.).

The cumulative index in the year reached -0.99% against -0.64% recorded in March. As a comparison, the cumulative rate up to April 2022 had been 7.09%. The 2023 result was the second lowest figure ever registered for April since the beginning of the time series in 2014.

The highest changes were in mining and quarrying industries (15.59%), pulp and paper (-9.89%), petroleum refining and biofuels (-8.57%) and beverages (7.51%). The major influences were recorded in petroleum refining and biofuels (-1.03 p.p.), mining and quarrying industries (0.68 p.p.),  other chemicals (-0.64 p.p.) and pulp and paper (-0.34 p.p.).

The cumulative index in 12 months was -4.63%, the biggest drop in the time series of this indicator. The four highest changes were: other chemicals (-25.22%), petroleum refining and biofuels (-17.41%), tobacco (17.22%) and beverages (14.28%). On the other hand, the most influential sectors were: other chemicals (-2.63 p.p.), petroleum refining and biofuels (-2.22 p.p.), basic metals (-0.90 p.p.) and mining and quarrying industries (-0.44 p.p.).

The change of -0.35% in relation to March had an impact on the major economic categories: capital goods, -0.19%; intermediate goods, -1.23%; and consumer goods, 1.03%, with -0.05%% observed in durable consumer goods and 1.25% in semi and non-durable consumer goods.

Intermediate goods, accounting for 56.34% of the overall index, represented the major contribution to the index, and it accounted for -0.70 p.p. of the -0.35% change in mining and manufacturing industries.

Consumer goods (influence of 0.37 p.p.) and capital goods (-0.01 p.p.) complete the list. In the case of consumer goods, the influence observed in April was split into 0.00 p.p., due the change in prices of durable consumer goods and 0.37 p.p., due to the change in prices of semi and non-durable consumer goods.

As for the cumulative index in the year, changes were 0.34%, for capital goods; -’2.79%, for intermediate goods; and 1.68%, for consumer goods - with durable consumer goods having a cumulative change of 0.78% and semi-and non-durable consumer goods, of 1.85%.

In terms of influence on the cumulative index in the year, capital goods accounted for 0.03 p.p. of the rate of -0.99% registered in the overall industry this year. Intermediate goods, in turn, accounted for -1.60 p.p., whereas consumer goods exerted an influence of 0.59 p.p. on the aggregated result of industry, an influence shared by prices of durable consumer goods (0.04 p.p.) and semi-durable and non-durable consumer goods (0.54 p.p.).

Considering the cumulative index in 12 months, the change of prices of capital goods was 8.55% in April 2023.   The prices of intermediate goods, in turn, changed -8.78% in the period of one year and the change in consumer goods was -0.06%, with durable consumer goods having changed by 3.55% and semi and non-durable consumer goods, -0.73%.

Concerning the influences, capital goods, weighting 7.55% in the overall index, accounted for 0.57 p.p. of the cumulative change of -4.63% in industry for 12 months. There was, also, an influence of -0.02 p.p. from consumer goods and of -5.17 p.p. from intermediate goods.

The result of consumer goods was influenced in 0.19 p.p. by durable consumer goods and in -0.21 p.p. by semi and non-durable consumer goods (0.52 p.p), the latter with a weight of 83.71% in the index of this major category.

Mining and quarrying industries - The prices in this sector registered a positive change (1.70%) for the fourth month in a row. As a result, the cumulative indicator in the year reached 15.59% and in the last 12 months, -8.39%. In the last indicator, the changes were negative since June 2022 (-10.13%).
Considering all the industrial activities, this sector recorded the highest change comparing April 2023 with December 2022. This sector exerted the second biggest influence both in the cumulative index in the year (0.68 p.p. in -0.99%) and in the cumulative rate in 12 months (-0.44 p.p. in -4.63%).

Food products - The prices in this sector changed, on average, 0.33% in the monthly comparison. With this result, the cumulative index in the year reached -0.29% and, in 12 months, -0.75%, the first negative figure in this comparison since July 2019 (-0.73%).

It is not usual that this sector, the one with the biggest weight in industry (the current weight is 24.33% in April), did not stand out among the three indicators computed, either as a change or an influence, yet it did not occur this month.

In the composition of the result of this month, soybean derivatives stood out in terms of negative pressure, a consequence of the strong supply of this product in the current harvest. On the other hand, VHP sugar and frozen poultry repeated the sign of the sectoral change. Despite the beginning of harvest of sugarcane in April, sugar was not available regularly as a heavy rainfall jeopardized the transportation from the producing areas to the industry. And, in the case of chicken, the producing industries pinpointed a bigger demand for the product, which explained the rise in the prices between March and April.

Pulp and paper - The change in the prices of this sector was the second highest in the overall industry, both in the monthly indicator (-3.57%) and in the cumulative index in the year (-9.89%). The cumulative index in the last 12 months reached 3.10%.  The drop in the foreign prices of pulp and the change of -3.7% of the dollar against the real were the major reasons for the negative result in the monthly indicator.

Petroleum refining and biofuels - The prices in this sector retreated in the monthly comparison for the fifth month in a row, hitting -1.64%. As a result, the cumulative index in the year was -8.57% and the cumulative rate in 12 months, -17.41%, the most intense drop since June 2020 (-19.18%).

This sector stood out as it registered the third most intense change in the cumulative index in the year and the second most intense change in the cumulative indicator in 12 months (both of them negative). In terms of influence, it was the second in the monthly indicator (-0.18 p.p. in -0.35%) and in the cumulative index in 12 months (-2.22 p.p. in -4.63%) and the first in the cumulative rate in the year (-1.03 p.p. in -0.99%). In addition, it was the second one in terms of current weight (11.07%).

Other chemicals - The chemical industry remained as one of the major IPP drivers. The prices retreated 2.61% this month, the fourth most intense rate among the activities surveyed. The reduction was the major influence (-0.22 p.p.) in the change of -0.35% of the IPP.

The price of chemicals at the factory gate was also a highlight in the long-term indicators. The cumulative index in the year was -7.35%, exerting the third biggest influence on the overall index, -0.64 p.p. of the change of -0.99%. The cumulative index in 12 months was -25.22% compared with April 2022, accounting for the most intense influence on the record deflation of the IPP (M/M-12): -2.63 p.p. in the change of -4.63% of the overall industry.

In April, the primary petrochemistry remained rising, after months of increase in the foreign prices of naphtha, due to the rerouting of the European demand and constraints in the American supply. Therefore, the sectoral result remained guided by the lower domestic prices of fertilizers and the additional component of demand retraction in the soybean crops plays a relevant role in this movement, which was affected by the dropping trend of the international price of the macro-nutrients over the last months.

Pharmaceuticals - The price of medicines at the factory gate increased 3.97% in April over March, partly due to the annual adjustment established by the regulating office, which allowed producers to “fix” the prices at a new level, with the most intense increase since the last adjustment between March and April 2022, when prices rose 6.53%.

The change of 3.97% was the most intense among the mining and manufacturing industries, and provided the biggest contribution to the overall index, with a transference of 0.10 p.p. to the change of -0.35% of the industry aggregate. This result caused the sector to be the major vector, in terms of influence, to balance the deflation perceived in the April´s IPP.

Basic metals - The change in the prices of this activity was 0.10%, the second consecutive positive figure and the third one in 2023. The cumulative index in the year reached 0.80%. In the last 12 months, this sector accumulated a reduction of 13.12%, the most intense drop in this indicator since November 2022 (-13.76%). And it was in terms of the cumulative indicator in 12 months that the sector stood out, having accounted for the third biggest influence among the 24 activities surveyed within the IPP, with -0.90 p.p. in -4.63% of change in the overall industry.

The result of this sector was mainly influenced by the steel group, which, after a series of nine consecutive drops between June 2022 and February 2023, recorded the second consecutive rise over the previous month, with a result of 2.31% in April, accumulating a change of 2.17% in the first four months of the year. However, in the last 12 months, the result of the group remained  on the negative side, with a change of -11.43%.

Motor vehicles - The monthly change of 0.16% was the 34th consecutive rise in this indicator, accumulating an increase of 36.31% in the period. This sector had been impacted by cost increases, especially of electronic inputs due to the semiconductor crisis. The cumulative index in the year reached 1.29% and the cumulative rate in 12 months (6.08%) reported its lowest figure since April 2020 (5.88%). The activity of motor vehicles stood out for having the fourth highest weight in the current computation of the general indicator, with a contribution of 7.34%.