Brazil's producer price index fell 0,3% in July, influenced by food prices, says IBGE.
Among the 24 activities analyzed, IBGE indicated that 12 experienced price decreases in the monthly comparison.
Reuters - Producer prices in Brazil fell 0,3% in July, influenced by the food sector, marking the sixth consecutive negative rate, the Brazilian Institute of Geography and Statistics (IBGE) reported on Friday.
The decline, however, lost momentum after a 1,27% deflation in June, bringing the Producer Price Index (PPI) to a cumulative 12-month increase of 1,36%.
Among the 24 activities analyzed, IBGE indicated that 12 experienced price decreases in the monthly comparison.
The biggest influences on the overall result for July were exerted by food (-0,33 percentage points), metallurgy (-0,11 pp), extractive industries (0,10 pp) and machinery and equipment manufacturing (0,06 pp).
"The most intense influence, from the food sector, was negative and helps explain the overall result for the industry. Excluding food, the other activities, combined, had a positive influence of 0,03 points, meaning that a large part of the reason for the IPP remaining in negative territory in July comes from the fall in food prices," explained Murilo Alvim, manager of the IPP.
In terms of variation, the highlights were extractive industries (+2,42%), metallurgy (-1,65%), metal products (-1,54%) and perfumery, soaps and cleaning products (+1,41%).
The food sector fell by 1,33%, the sixth time this year, but also less intense than the rate in June (-3,42%).
"...we can highlight the lower sugar prices, a decline that is in line with the fall in international prices, largely due to an increase in supply in major producing countries such as India, Thailand and Brazil. This caused the sugar manufacturing and refining group to show a contraction of 4,31% in July and was the main influence on the sector's result," explained Alvim.
He also highlighted the reduction in coffee prices due to lower production costs, "largely due to the start of the harvest of new crops in the country, which caused the coffee roasting and grinding group to show the largest drop in the monthly indicator in its entire historical series, with a decline of 6,20% in July," he added.
The IPP measures the variation in product prices at the “factory gate,” that is, without taxes and freight, for 24 activities in the extractive and manufacturing industries.
