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Producer Price Index (IPP) changes 0.51% in February

FEBRUARY 2014
0.51%
January 2014
1.43%
February 2013
-0.35%
Cumulative in 2014
1.95%
Cumulative in 12 months
8.24%

Compared with January, the Producer Price Index (IPP) changed, on average, 0.51% in February 2014. This figure was lower than that registered in the comparison between January 2014 and December 2013 (1.43%). The rise reached 1.95% in the year and 8.24% in 12 months. IPP measures the evolution of “factory gate” prices, discounted taxes and freight, of 23 sectors of the manufacturing industry.  The complete publication can be accessed on page http://www.ibge.gov.br/english/estatistica/indicadores/precos/ipp/default.shtm.

14 out of 23 activities surveyed increases prices

In February 2014, 14 out of the 23 activities registered positive changes of prices, against 19 last month. The four highest changes were recorded in products included in the activities of wearing apparel and accessories (2.19%), pulp and paper (-1.87%), electrical machinery and apparatus (1.77%) and footwear and leather articles (1.56%). In terms of influence, the highlights were other chemicals (0.17 percentage points), food (0.09  p.p.), motor vehicles (0.07 p.p.) and paper and pulp (-0.06 p.p.).

In the comparison between February 2014 and December 2013 (cumulative indicator in the year), the IPP reached 1.95% against 1.43% in January 2014. This was the second highest figure for February (2.74% in February 2010) in the series. Among the activities that posted the highest changes in this indicator, the highlights were: basic metals (5.15%), oil refining and ethanol production (5.09%), furniture (4.40%) and electrical machinery and apparatus (4.26%). The sector of higher influence in this indicator were: oil refining and ethanol production (0.56 p.p.), other chemicals (0.40 p.p.), basic metals (0.39 p.p.) and food (-0.22 p.p.).

By comparing February 2014 with February 2013 (cumulative indicator in 12 months), the prices changed 8.24% against 7.31% in January. It was the highest figure in the series from this perspective. The four highest changes in prices were registered in: tobacco (19.31%), footwear and leather articles (14.50%), other transportation equipment (12.80%) and electrical machinery and apparatus (11.12%). The main influences over this indicator came from food (1.97 p.p.), oil refining and ethanol production (1.18 p.p.), other chemicals (0.92 p.p.) and basic metals (0.81 p.p.).

Food: prices in this sector changed 0.44%. As a consequence, the cumulative rate in the year changed from -1.52% to -1.09%. In spite of the negative behavior of the cumulative change, the prices in February 2014 were 10.11% higher than those in February 2013, as the first two months of 2013 recorded a cumulative change of -4.06%. Considering the highest changes and the highest influences, only sterilized/UHT/Long Life milk appeared in both cases. As to the influences, the other products were: residues from the extraction of soybeans, wheat flour and crystallized sugar. These four products accounted for 0.31 p.p. (of 0.44%), considering that residues from the extraction of soybeans and sterilized/UHT/Long Life milk posted positive price changes and the other two, negative changes. Although February marked the harvest of soybeans, the weather - droughts. nearly in the whole country and excess of rainfall in Mato Grosso - as well as the low level of stocks in the USA and the currency rate made the prices of raw materials for residues from the extraction of soybeans rise. The offhand drought positively affected the price of milk. The smaller demand in the foreign market explained the fall in the prices of crystallized sugar. Finally, low level of trade (Informativo CEPEA) in the South of Brazil, caused by the expectable product from Argentina, made the prices of raw materials of flour decline in February.

Pulp and paper: the manufacturing of pulp in February registered a negative change of 1.87% compared with January, thus reducing the cumulative rate to 1.05%. As to the last 12 months, this activity maintained the positive figure of 11.07%. Including the negative figure of February, this activity became the highest negative influence over the IPP in February (-0.06 p.p.). The products that exerted the highest negative impact on this figure were pulp, writing and printing paper and paper for other graphic purposes, uncoated with inorganic materialuncoated Kraft paper for packing. Among those products more important for the February figure, diapers was the only that recorded a positive change. These products altogether added up to -1.8 p.p. in the February figure. Only pulp changed negatively in the cumulative rate in the year. The products writing and printing paper and paper for other graphic purposes, uncoated with inorganic material, diapers and folding boxes and cardboards made of paperboard or cardboard posted positive changes. All the products that mostly impacted the cumulative rate in 12 months posted positive changes: pulp, writing and printing paper and paper for other graphic purposes, uncoated with inorganic material, notebooks and wavy or corrugated paperboard boxes.

Oil refining and ethanol production: the prices registered an average change of 0.56% in February 2014 in relation to January, following the positive path started in December. The February figure came at a lower level after recording the highest monthly change of this sector in January. This sector posted a participation of 0.06 p.p. in the overall industry, considering a total of 0.51% of all the manufacturing activities. Such figure caused the cumulative index in the last 12 months of this sector to rise 10.58%, ranking in the third position in terms of the influence over this indicator among all the 23 sectors covered by the IPP.  This sector registered a cumulative rate of 5.09% in the year, much as a result of the changes in January. Among the four products that mostly influenced the monthly indicator, three of them recorded positive changes: ethyl alcohol (anhydrous or hydrated), naphtha and kerosene. Basic lubricant oils posted a negative change. These products together accounted for 0.57 p.p. of the indicator of 0.56% of this sector, which meant that the other products contributed in the reverse direction.

Other chemicals: the chemical industry changed its prices by 1.54% in the February indicator over January 2014, following the positive path along the last two months. After decelerating from October to November, the indicator of the last 12 months returned to an upward path in December, January and February, reaching 8.15% over February 2013. This sector registered a rate of 3.60% in the year. As to the February over January figures, the four products that stood out were herbicides, NPK-based manure, urea and superphosphates. Out of the four products, only superphosphates registered a negative monthly change. The four products together accounted for 0.72 p.p. of a total of 1.54% of all chemicals. In addition to fertilizers and their intermediate products (NPK-based manure and urea), basic petrochemicals and resins also influenced (ethylene and polypropylene) the cumulative rate in the year, all of them positively. The 12-month indicator still reflected the high influence of the rise in the prices of naphtha along 2013, highlighted by basic petrochemicals (propylene and ethylene) and resins (polyethylene), as well as herbicides. All the products recorded a positive change compared with February 2013.

Basic metals: the February 2014 figure was 0.81%, reaching 10.54% in the cumulative rate in the last 12 months (the highest figure in the series) and 5.15% in the first two months of the year, the most significant figures for this sector since the beginning of the survey. In February, the four products that mostly changed were linked with the steel industry. One of them was a semi-finished steel product (carbon steel ingots, blocks, rods or plates) and three were flat rolled steel products (other steel alloy bars, except stainless, which changed negatively, stainless steel coils or plates, including stripes and uncoated thick steel carbon plates). Among these products, uncoated thick steel carbon plates and carbon steel ingots, blocks, rods or plates significantly influenced in February, together with cold-rolled steel carbon coils, non-coated and non-alloy aluminum in raw form. These four products contributed with 0.91 p.p. and the other 18 products of this activity, with -0.10 p.p. to the February figure. As to the influence on the cumulative figure in the year and in the last 12 months, these same four products were the highlights and biggest contributors: non-alloy aluminum in raw form, cold-rolled steel carbon coils, non-coated, hot-rolled steel carbon coils, non-coated and carbon steel ingots, blocks, rods or plates.

Motor vehicles: the manufacturing of motor vehicles in February over January was 0.65%, rising the cumulative rate in the year to 1.72%. The cumulative indicator in 12 months registered 3.65%, the highest rate for this activity in the time series. The most important products for the monthly figure were passenger cars, gasoline, ethanol or bi-fueled, of any power and tractor trucks for trailers and semi-trailers, with positive changes and diesel trucks with an over 5-t capacity and bus bodies, with negative changes. These four products added up to 0.53 p.p. in the monthly figure. In the cumulative rate in the year, the products passenger cars, gasoline, ethanol or bi-fueled, of any power, tractor trucks for trailers and semi-trailers and gearboxes for motor vehicles recorded positive changes. The product starters for spark-ignition engines stood out due to its negative change. All the products that stood out in the cumulative rate in 12 months posted positive changes.

 


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