São Paulo – In November, industry prices in Brazil registered their highest decline since January 2014, according to the Producer Price Index (IPP) published this Friday (4) by the Brazilian Institute of Geography and Statistics (IBGE). The index measures variations in “factory-gate prices” – without considering taxes or shipping prices – of 24 activities of mining and manufacturing industries. IPP declined 1.54% in November, a result below that of October (-0.68%). The result was a positive 1.4% in November 2017.
Among the activities analyzed, 13 had price drops in November. The ones with the highest positive and negative changes from October to November 2018 were: petroleum and alcohol products refining (-7.23%), other chemical products (-4.18%); printing (2.65%), and metal products (-2.03%). The cumulative index from January to November 2018 reached 11.47%.
According to IBGE, the impact on the prices of oil refining was the highest since January 2010 (beginning of the series). “The price of the extracted raw oil dropped, reducing the costs of refining and affecting all the production chain. The diesel oil, which affects the most the refining, became cheaper. Besides, naphtha, the raw material basic for chemical industry, also had a price drop,” stated the director of analysis and methodology of IBGE Alexandre Brandão in a press released issued by the institution.
Another issue is the dollar variation during the period analyzed by the IPP, which rose in October and declined slightly in November. “It made the imports of elements participating in the refining process cheaper, reducing the costs even more,” reported Brandão.
Among other sectors such as metallurgy, comparing the prices in November with those of October 2018, there was a 0.06% drop. The chemical industry had a -4.18% average change over October. The sector of machines and equipment registered a positive 1.59% change in prices in November over October. And the food sector registered a 1.24% drop in November, the fifth negative variation of the series in the year and the second biggest one.
Translated by Guilherme Miranda
