In January, the prices of the Overall Industry changed, on average, 0.56% compared with December, above the change registered between December and November (-0.35%).
In 12 months, the IPP of Industry recorded a cumulative rate of 9.86%. Among the 24 activities surveyed, 17 posted positive price changes, against 13 in the previous month. The Producer Price Index (IPP) measures the evolution of the prices of products 'at the factory gate', discounted taxes and freight.
The complete publication of the IPP can be accessed here.

Table 1
Producer Price Indexes, according to Overall Industry and Sections
Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria.

The four highest changes were registered in the following activities: Mining and quarrying industries
(-14.42%), tobacco (4.77%), other transportation equipment (3.74%) and fabricated metal products (3.35%). The greatest influences came from mining and quarrying industries (-0.40 p.p.), food products (0.33 p.p.), motor vehicles (0.23 p.p.) and basic metals (0.12 p.p.).

The prices changed 9.86% in relation to January 2015, against 8.81% in December 2015. The four highest price changes occurred in other transportation equipment (36.79%), tobacco (34.85%), paper and pulp (22.75%) and food products (16.47%). The sectors that influenced the most were: food products (3.14 p.p.), other chemicals (1.38 p.p.), other transportation equipment (0.79 p.p.) and motor vehicles (0.78 p.p.).

Also in relation to December 2015, the changes among the Major Economic Categories were: 2.36% in capital goods; 0.11% in intermediate goods; and 0.86% in consumer goods, being 1.43% in durable consumer goods and 0.68% in semi and non-durable consumer goods.

Table 4
Producer Price Indexes, according to Overall Industry and Major Economic Categories
Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria.

The influences of the Major Economic Categories were: 0.21 p.p. from capital goods, 0.06 p.p. from intermediate goods and 0.30 p.p. from consumer goods. In the case of consumer goods, 0.18 p.p. were due to price changes registered in semi and non-durable consumer goods and 0.12 p.p. in durable consumer goods.

In 12 months, the price change in industry reached 9.86%, involving the following changes: capital goods, 14.22%% (1.21 p.p.); intermediate goods, 9.67%% (5.47 p.p.); and consumer goods, 9.12% (3.18 p.p.), being the influence of 'durable consumer goods' 0.50 p.p. and that of 'semi and non-durable consumer goods', 2.68 p.p.

The sectors that were among the four main highlights in terms of high price change and/or great influence in January 2016 are analyzed below.

Mining and quarrying industries: this sector recorded the third consecutive price drop in January over December. The negative change (-14.42%) was the highest among the sectors of the industry, due to the low prices of the commodities at the international market. This activity also reported the most intense negative influence (-0.40 p.p.).

All the products of this activity negatively influenced the monthly change of prices. In descending order of influence, the four highlights were: 'iron ores', 'crude petroleum oil', 'crude or processed copper ores' and 'natural gas'.

The cumulative change in the last 12 months was -11.08%. Except for 'natural gas', the other products of this indicator posted price drops in this period.

Food products: compared with December 2015, the average price change in this sector was 1.63% in January 2016. This figure was higher than those reported in November and December – which were below 1% –, though lower than those registered in August (1.94%) and September (5.47%). Considering this result, the change recorded between January 2015 and January 2016 was 16.46%, the highest figure since August 2012 (17.85%).

The highlights in terms of change and influence in relation to the previous month did not match. Those products that stood out in terms of change did not include those with the highest weights in this sector. Two of them ('cocoa butter' and 'condensed milk') recorded negative price changes. In terms of influence, two products ('residue of soybean oil extraction' and 'crystallized sugar') are among those with the highest weights, positively influencing like the other two ('crude degummed soybean oil' and 'refined soybean oil'). These four products contributed with 0.80 p.p. (in 1.63%). The increase of soybean derivatives was in line with the currency devaluation (about 4.7% in January over December and 54.0% in January 2016 over January 2015). The case of sugar got worse as a result of the reduced supply in the world and of the higher production of alcohol in Brazil, to the detriment of sugar.

'Crystallized sugar', the soybean oils and 'concentrated orange juice' were the products that mostly influenced the cumulative index in 12 months, confirming the effects of the currency devaluation and of the bigger production of alcohol from sugarcane.

Other chemicals: the third consecutive negative change of 0.51% broke a previous series of five positive price changes, which generated a cumulative change of 13.42% in 12 months.

The major changes were registered by products that did not show the highest weights, which was not the case of those with the greatest influence, whose three highlighted products were in this category: 'NPK-based manure and fertilizers' and 'polypropylene (PP)' with negative figures and 'unsaturated ethylene (ethene)' with a positive figure. 'Ammonium sulphate or urea' followed this group with sufficient negative price change to rank it among those that mostly influenced the results in relation to the immediately previous month. The four items of greater influence accounted for -0.62 p.p. in the result of -0.51%; that is, the other 28 products contributed with 0.11 p.p.

Basic metals: a positive price change was recorded between December and January, after two months of decreasing prices. Even considering the positive figure, this sector posted a cumulative drop of 0.70% in the last 12 months – third consecutive negative figure in this type of comparison.

Among the products with the highest price changes, only 'unwrought non-alloy aluminum' was part of the group of those with the highest weights. On the other hand, three products among those that mostly influenced the January´s figure belonged to this category: 'uncoated hot-rolled steel carbon coil', 'carbon steel ingots, blocks, rods or plates' and the one previously mentioned. Despite its significant influence, 'unwrought aluminum alloy' was the only product which was not among those with the greatest contributions. All the four products that mostly influenced in January over the immediately previous month registered positive price changes.

Among the 22 products surveyed, the four highlights in terms of influence in relation to the previous month accounted for 2.01 p.p. of the January´s change (1.69%).

Concerning the major contributions to the cumulative index in the last 12 months, two products recorded positive changes – 'carbon steel ingots, blocks, rods or plates' and 'unwrought aluminum alloy' – and two exerted negative influences – 'uncoated cold-rolled steel carbon coil' and 'uncoated hot-rolled steel carbon coil'.

When the IPP was firstly released in December 2009, the group of products associated with non-ferrous materials accounted for 23.2%, against 76.8% of those associated with steel. What is interesting is that the relation that showed that the steel group weighted more than three times the non-ferrous group now is close to two.

Motor vehicles: the change from December to January (2.14%) was the highest in the time series. Among the highlighted products, two of them – 'tractor-truck for trailers and semi-trailers' and 'diesel truck with load capacity above 5t' – were among those with the highest weights and also those with the greatest influences, together with 'flex-fuel, gasoline or ethanol passenger car with any engine power output' and 'engine parts for motor vehicles'. The four products – those with the highest weights – contributed with 1.81 p.p.

The weight of 'flex-fuel, gasoline or ethanol passenger car with any engine power output' was much higher than the others – nearly 50%. Therefore, even a lower increase in this product influenced the most, as it did in January. On the other hand, products like 'tractor-truck for trailers and semi-trailers' have enough room at the international market, which makes the currency devaluation to increase their prices in real.

Other transportation equipment: the prices of this sector changed 3.74% in January compared with the previous month, posting the third highest change in the manufacturing and mining industries. Again, the January´s figure was mainly due to the higher prices of 'airplanes weighting more than 2,000kg', which, priced at international currency, reflected the currency devaluation (R$/US$) in January.

This sector registered the highest price change among the activities surveyed in relation to January 2015 (36.79%), exerting the third greatest influence on the cumulative index in 12 months and following the trend of the currency exchange.

Social Communication
2 March 2016