Inflation in industry increases by 1.86% in August, all activities increase September 29, 2021

The food sector was the one that most influenced the overall result of the August PPI РPhoto: Jos̩ Fernando Ogura / AEN-PR

In August, industrial prices rose 1.86% from the previous month. All 24 activities surveyed increased their prices, which only happened in August 2020. The data comes from the Producer Price Index – PPI, published today (29) by the IBGE, which measures the evolution of the prices of products at the “exit of the factory”. “, without tax or freight, of 24 activities of mining and manufacturing industries. In the year, the cumulative increase in industrial prices reached 23.55% and, in 12 months, 33.08%.

“The strong demand from foreign trade and the devaluation of the real against the dollar have had an impact on industrial prices on the domestic market. For example, the movement of the prices of iron ore and crude oil almost directly affects chemicals, refining In the food sector, exports of raw materials, such as soybeans and corn, push up the costs of the animal feed and, consequently, those of meat ”, specifies Manuel Souza Neto, director of the IPP.

The food sector was the most influential in the overall August PPI result (0.51 percentage point). Compared with July, food increased by 2.19%, being the seventh positive rate recorded during the year (the only negative rate was reported in June, 0.14%) and the second most high in 2021, just behind the rate of 2.66% recorded in April. The sector has accumulated an increase of 12.47% over the year.

In August, higher prices for poultry and frozen offal were among the main influences on the food sector index.

“The rise in prices has been impacted by both the increase in the cost of animal husbandry and the increase in demand. Beyond exports, the domestic market has also been impacted by the return of face-to-face courses and the tendency to replace beef. with chicken, ”says Souza Neto.

He added that the combination of off-season and climatic factors has contributed to increasing the prices of some foods.

“The production of sterilized milk / UHT / shelf-stable milk was influenced by the mid-year drought, which reduced acquisition in the dairy belts. As a result, the price of the product and all of its derivatives has increased. the ground coffee was influenced by the harsh winter, with frosts in important producing regions, which also impacted the harvest of sugar cane and its derivatives ”, underlines the researcher.

“Slaughtering and manufacturing of meat products” (2.72%), “manufacturing and refining of sugar” (3.64%) and “roasting and grinding of coffee” (6.54%) were the industry groups with above average price changes for mains power.

In contrast, the activity of petroleum and ethanol refining products (1.91%) was up for the fourth consecutive month. August’s rate was lower than July’s (3.27%), but still higher than the other two of those four months. In the year, the sector accumulates an inflation of 47.03%, the highest rate for August of the time series. “Gasoline, except for aviation”, “diesel fuel” and “ethyl alcohol (anhydrous or hydrated)” were the most intense influences on industry prices.

Prices in the chemical industry rose 2.82% in August, the largest increase since April (4.73%), recording a variation of 37.34% over the year and 50.49% during of the last 12 months.

“These results are mainly linked to international prices, including several raw materials, imported or not, such as naphtha. year and 73.63% in the last 12 months. These two cumulative rates are the highest in the entire time series, ”says Souza Neto.

With a rise of 2.58%, the base metal also stood out this month, its 14th straight positive rate. Among all the activities listed, this sector already has the third highest cumulative index of the year (40.59%) and the second in 12 months (56.98%).

“The results of recent months are linked to the behavior of groups of steel products and non-ferrous materials (copper, gold and aluminum), whose prices behave differently. The first group is affected by the prices of iron ore and by the evolution of the dollar against the real, as well as by the reorganization of stocks in the consumption chain. In the latter group, the values ​​of non-ferrous materials are linked to quotations on foreign commodity exchanges, ”concludes Souza Neto.

Learn more about the survey

The PPI aims to measure the average variation in selling prices received by domestic producers of goods and services, as well as its evolution over time, signaling short-term inflationary trends in Brazil. It is a key indicator for macroeconomic monitoring and, therefore, a valuable analytical tool for decision-makers, whether public or private.

The survey investigates, in just over 2,100 companies, the prices received by producers, excluding taxes, tariffs and freight, defined according to the most common commercial practices. Almost 6,000 prices are collected monthly. The complete tables with the results are available on Sidra.